Germany's Bayer will sell parts of its agrichemical business to rival BASF, it said on Friday, kick-starting a competitor in the seeds market even as it clears the way for its mammoth takeover of US-based Monsanto.
The deal between the two German giants has been delayed due to an in-depth probe by European regulators, but is expected to complete in the first quarter of 2018.
Yesterday's transaction was only to go ahead if Bayer's Monsanto merger was approved by competition authorities, and was itself subject to a competition probe.
Bayer says the assets to be sold include its global glufosinate-ammonium business and related LibertyLink technology for herbicide tolerance, almost all its field-crop seeds businesses, as well as respective R&D capabilities.
"With this investment, we are seizing the opportunity to acquire highly attractive assets in key row crops and markets", BASF Chief Executive Kurt Bock said in a statement.
To "address certain overlaps in the combined product portfolio" of the companies, it says it will sell to BASF "essentially all of the company's field crop seeds businesses", and the Liberty herbicide brand. The transaction also includes Bayer's trait research and breeding capabilities for these crops along with its LibertyLink herbicide-resistance trait technology and trademark.
The units included in the deal brought in revenues of about €1.3bn in 2016, with five factories, 10 research and development sites and strong positions in staple crops like soybeans, oilseed rape and cotton, especially in the Americas.
However, the company said that this deal will have no impact on Bayer's India business.
The transaction includes the transfer of relevant intellectual property and facilities, as well as more than 1,800 employees located primarily in the United States, Germany, Brazil, Canada and Belgium. 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.