Bayer clears EU hurdle for Monsanto deal with BASF sale
BRUSSELS: Bayer AG has cleared one big hurdle for its US$66bil takeover of Monsanto, winning European Union approval for the deal after agreeing to bolster BASF SE by selling it seeds, pesticides and digital agriculture technology.
Bayer and BASF “need to provide further evidence” of BASF’s ability and incentives to build the business into an important competitor in order for BASF to get approval to buy € the more than 6bil (US$7.4bil) package, the EU said.
The EU didn’t specify a buyer for Bayer’s vegetable-seeds unit. Bayer has suggested BASF should take it over.
The companies’ concessions allayed the EU’s antitrust “concerns in full,” said EU Competition Commissioner Margrethe Vestager.
“We have made sure that the number of global players actively competing in these markets stays the same.
“That is important because we need competition to ensure farmers have a choice of different seed varieties and pesticides at affordable prices,” he said.
The deal is the last of three big agricultural transactions that are reshaping global farming. DuPont Co had to sell most of its global research and development operations to placate EU concerns over its merger with Dow Chemical Co last year.
China National Chemical Corp also divested some overlapping products to win approval for its Syngenta AG bid.
Bayer shares reversed earlier losses to rise € as much as 1.4%, trading up 1.3% to 95.49 at 12:15pm in Frankfurt yesterday.
Bayer and Monsanto must still convince US regulators who are pushing for the companies to divest more assets to resolve antitrust concerns, a person familiar with the probe said last week.
Bayer is suing the Russian antitrust watchdog over an order for it to share technology with Russian companies.
Bayer said it is still aiming to complete the deal by the end of the second quarter. The company said it is working closely with the US Department of Justice.
“Receipt of the European Commission’s approval is a major success and a significant milestone,” chief executive officer Werner Baumann said in an e-mailed statement. — Bloomberg