The makeover at Bayer continues as the company attempts to purchase Monsanto. This time the German-based firm was granted concessions on proposed spinoffs.
Bayer announced Wednesday that the European Commission has approved two modifications to its original approval of the takeover bid. Earlier this week, the U.S. Department of Justice was reported to have given its nod to the deal, conditional on the sale of further assets to gain antitrust approvals.
The company now will sell some of its own seed-treatment assets to BASF, rather than the original plan to divest Monsanto’s NemaStrike, a broad- spectrum nematicide.
Bayer will also sell its digital-agriculture assets to BASF and then license to use the products. Under the previous European Commission agreement, Bayer had planned to retain ownership and license them to BASF.
German-based BASF has been the major benefactor of the Bayer-Monsanto tie-up. The European Commission had previously required that Bayer sell its vegetable seeds business to BASF. The commission has also said it is continuing to evaluate whether BASF meets all the necessary requirements to qualify as a suitable bidder for the Bayer assets.
When the European Commission originally approved the deal in late March 2018, Commissioner Margrethe Vestager, who oversees competition policy, said the remedies, which are valued over $6 billion (EURO), met the competition concerns.
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“In particular, 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. And we need competition to push companies to innovate in digital agriculture and to continue to develop new products that meet the high regulatory standards in Europe, to the benefit of all Europeans and the environment,” she said.
Previously, on Oct. 13, 2017, Bayer agreed to sell selected crop science businesses to BASF for nearly $7 billion. This first divestiture covered Bayer’s global glufosinate-ammonium business and the related LibertyLink technology for herbicide tolerance. It included most of the company’s field crop seed businesses and research and development capabilities. The seed businesses being divested include the global cotton seed business (excluding India and South Africa), the oilseed rape/canola business in North America and Europe and the soybean seed business.
Regulators from Canada and Mexico have yet to rule on the combination of companies. Any sales and licenses are still subject to a successful closing of the proposed acquisition of Monsanto. Bayer said the two companies are working closely with the relevant authorities to close the $62.5-billion deal in the second quarter.
Monsanto paused the anticipated 2018 commercialization of NemaStrike, citing human skin irritation issues associated with handling. The U.S. EPA issued registration for the product in May 2017, and it has gained approval in most states. Tioxazafen represents a new class of nematicidal chemistry.
To read full details of the European Commission’s original decision: click here.
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