Bayer to sell selected crop science biz to BASF for $7 billion

Bayer to sell selected crop science biz to BASF for $7 billion

BASF SE, the world's largest chemicals producer, has announced the acquisition of "significant parts" of Bayer's seeds and non-selective herbicide business for 5.9 billion euros (7 billion US dollars) on Friday.

The deal is contingent upon the completion of Bayer's acquisition of Monsanto, but the takeover still faces scrutiny from European regulators.

The proceeds of the sale are to go toward partially refinancing the Monsanto bid.

Environmentalists and politicians on both sides of the Atlantic fear that the deal, which would create a global seeds and pesticides behemoth with annual revenues of around 23 billion euros and 140,000 employees, would give the combined firm too much power over the food chain. After the closure of the planned Monsanto acquisition, Bayer will continue to be active in these same areas as a result of Monsanto's current programs, products and offerings.

The acquisition complements BASF's crop protection business, strengthening the company's herbicide portfolio and marking its entry into the seed business with proprietary assets in key agricultural markets.

"The Commission takes note of this announcement".

"In light of the planned acquisition of Monsanto, Bayer has signed an agreement to sell selected Crop Science businesses to BASF for Euro 5.9 billion", Bayer said in a statement.

Bayer announced the deal agreement on its website, divulging the details in a statement. "As part of the agreement, BASF has committed to maintain all permanent positions, under similar conditions, for at least three years after closing of the transaction".

The BASF deal, however, likely helps address that worry, among others.

The Ludwigshafen-based group has sat on the sidelines of a dance of merger activity between some of the world's biggest chemical companies, including a Dow-Dupont tie-up in the U.S. and ChemChina's takeover of Swiss firm Syngenta.

"With this investment, we are seizing the opportunity to acquire highly attractive assets in key row crops and markets", said Dr. Kurt Bock, chairman of the Board of Executive Directors of BASF SE.

It could keep BASF in the running as it squares off against the three seed and agrochemical titans born of the spate of mega-mergers. Bayer shares were trading over 1% higher mid-morning, while BASF shares were a little lower.

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