published on May 29, 2018 - 12:40 PM
Written by ,

(AP) — German pharmaceutical giant Bayer AG has agreed to the U.S. government’s demand that it sell about $9 billion in agriculture businesses as condition for acquiring Monsanto Co., a U.S. seed and weed-killer maker.

Antitrust regulators at the Justice Department say it’s the biggest divestiture ever required for a merger. The regulators say they directed Bayer to divest assets such as vegetable oils, seeds and seed treatments to ensure fair competition in the market after the massive agriculture business deal goes through. The assets will be sold to BASF, a German chemical company.

Bayer’s $57 billion takeover of Monsanto has been watched by competitors and environmental groups, which are fearful that the number of players in the business of selling seeds and pesticides will shrink further and give a single company an exclusive grip on the food chain.

Monsanto, based in St. Louis, is one of the world’s biggest seed companies. The merger would make Bayer the largest supplier in the world of pesticides and seeds for farmers.

The divestiture proposal will be filed in federal court and opened to public comment for 60 days.

In March, the European Union approved the merger on condition that Bayer sell $7.4 billion in assets to BASF to eliminate overlaps in seed and pesticide markets. The U.S. Justice Department said after the European action that it continued to have concerns over the proposed merger, especially its potential impact on American farmers and consumers, which could differ from its effects in Europe. Genetically modified seeds, for example, are used widely in the U.S. but mostly banned in Europe.

The merger also has won approval from China, Brazil and Australia.

Bayer said it has now secured nearly all the needed government clearances for closing the deal.

“Receipt of the (Justice Department’s) approval brings us close to our goal of creating a leading company in agriculture,” Bayer CEO Werner Baumann said in a statement. “We want to help farmers across the world grow more nutritious food in a more sustainable way.”

Some antitrust experts had warned that the merger would eliminate direct competition between two of the biggest players in the seed industry, giving the new company lopsided control over U.S. cotton acreage, and commercial seed development for canola, soybean and corn.

Two big mergers last year already have reshaped the global seed and pesticide market: Dow Chemical’s combination with DuPont last year, and China National Chemical Corp.’s acquisition of Syngenta, a Swiss seed and pesticide maker.


e-Newsletter Signup

Our weekly poll

Are you willing to travel for business again?

Loading ... Loading ...

Central Valley Biz Blogs

Popup
shares

3/5

Article views

remaining

Sign up icon

To continue website access to

TheBusinessJournal.com

please create a FREE account OR login here.

1/5

Article views

remaining

SKIP THE POP-UPS
For only $59 for one 1-year you will receive the Print edition along with EVERYTHING The Business Journal has to offer digitally, PLUS you will have unlimited 24- hour a day access to view articles at

TheBusinessJournal.com

Use Promo Code

*New Subscribers Only

Digital and Print

XX Days Remaining

until you can view 5 more free articles

Sign up icon

Want access? Subscribe now & save $20 OFF.

Use Promo Code

WEBSUB20

* NEW SUBSCRIBERS ONLY