by Eyk Henning and David McLaughlin
Bayer AG will put some of its seed businesses up for sale, according to people familiar with the matter, in an attempt to address likely antitrust concerns over its $66 billion combination with Monsanto Co.
The Leverkusen, Germany-based company will send out information packages on three assets, which it may sell separately, to potential bidders, the people said, asking not to be identified because the deliberations are private. None of Monsanto’s assets will be sold in the process, they said. The process could start as soon as this week, one of the people said.
Among the products being offered are the cottonseed business Bayer acquired from Monsanto for more than $300 million in 2007, as well as canola seed operations and LibertyLink, a herbicide-resistant crop gene, the people said. Representatives for Bayer and Monsanto declined to comment. Reuters had reported on the potential asset sales previously.
Bayer’s resolve to start selling assets before antitrust regulators have made recommendations highlights the German company’s drive to conclude the deal as quickly as possible. A sale of the three assets, which have overlaps with Monsanto’s products, was widely expected to avoid a run in with regulators. In cottonseed, U.S. government data showed that Bayer and Monsanto together control about 58% of sales in the country.
Bayer has already filed for approval in the U.S. and will wait to petition Europe in the second quarter after regulators there requested more information on the deal, Chief Executive Officer Werner Baumann said last month. The company has said it remains confident of closing the transaction by the end of the year. The review is in the early stages in the U.S. and the Justice Department could require additional asset sales to resolve competition concerns.
Agricultural businesses have been dogged by falling crop prices globally. Bayer has said it expects a slight recovery in the seed and crop protection market this year, though it expects the industry to remain volatile. Falling crop prices and a quest for greater efficiency triggered a cascade of deals in the industry including tie ups between DuPont Co. and Dow Chemical Co. and China National Chemical Corp. and Switzerland’s Syngenta AG.
Dow Chemical and DuPont are on track to win European Union approval for their tie up as soon as this month, people familiar with the matter have said. DuPont has offered to sell part of its pesticides business and related research and development operations. The EU is also weighing concessions made by ChemChina over its purchase for Syngenta, and there’s an April 12 deadline to decide on the deal.
--With assistance from Johannes Koch and Andrew Noël.
Amy Thomson, Tara Patel
© 2017 Bloomberg L.P