BASF buys up Bayer’s seeds assets in US$7 billion deal

13 Oct 2017 --- German chemical company BASF has signed an agreement to acquire significant parts of Bayer’s seed and non-selective herbicide businesses as the giant intends to divest as part of its planned acquisition of Monsanto. Bayer is selling some parts of its business to ease the passage of the planned Monsanto-Bayer megadeal which is still under scrutiny from regulators with competition concerns.

The sell-off to rival BASF will likely smooth over these concerns easing the path for the impending takeover of the US seed maker Monsanto.

On BASF’s side, it says the deal will expand its agricultural solutions offer and underpins its commitment to agriculture, innovation and long-term growth. 

The all-cash purchase price is €5.9 billion (US$7 billion), subject to certain adjustments at closing. The assets to be acquired include Bayer’s global glufosinate-ammonium non-selective herbicide business, commercialized under the Liberty, Basta and Finale brands, as well as its seed businesses for key row crops in select markets: canola hybrids in North America under the InVigor brand using the LibertyLink trait technology, oilseed rape mainly in European markets, cotton in the Americas and Europe as well as soybean in the Americas. 

The transaction also includes Bayer’s trait research and breeding capabilities for these crops and the LibertyLink trait and trademark.

For the full year 2016, sales of the business to be purchased from Bayer amounted to around €1.3 billion (US$1.5 billion) and EBITDA to around €385 million (US$455 million). The transaction is subject to the closing of Bayer’s acquisition of Monsanto and approval by relevant authorities and is expected to close in the first quarter of next year.

“With this investment, we are seizing the opportunity to acquire highly attractive assets in key row crops and markets. It will be a strategic complement to BASF’s well-established and successful crop protection business as well as to our own activities in biotechnology,” said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE. “The acquisition will further enhance our agricultural solutions offer, which is a core pillar of BASF’s portfolio.”

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. 

“Building on the competent new team members and the enhanced portfolio, we will offer farmers a greater choice of solutions addressing their needs for high-quality seeds, chemical and biological crop protection,” explained Saori Dubourg, Member of the Board of Executive Directors of BASF SE and responsible for the Agricultural Solutions segment. 

“Moreover, this transaction will create new opportunities for future growth and strengthen our global innovation potential.”

More than 1,800 commercial, R&D, breeding and production personnel shall transfer from Bayer to BASF. These employees are primarily located in the US, Germany, Brazil, Canada and Belgium. 

Furthermore, BASF will acquire the manufacturing sites for glufosinate-ammonium production and formulation in Germany, the US, and Canada, seed breeding facilities in the Americas and Europe as well as trait research facilities in the US and Europe. 

“We look forward to welcoming our new colleagues to BASF. As highly experienced, dedicated and motivated professionals they will enrich our team with their expert knowledge in crop protection, seeds and traits. Together, we will shape the long-term success of BASF, serving the needs of farmers around the globe,” said Markus Heldt, President of BASF’s Crop Protection division.”

Meanwhile, aside from the Monsanto-Bayer deal, just a few weeks ago Dow Chemical Co. and DuPont Co. closed their US$130 billion merger.

The so-called merger of equals was finalized after over a year of discussion and regulatory approvals and will bring together two chemical industry giants to form a new company named DowDuPont. 

The combined entity will operate as a holding company with three divisions – Agriculture, Materials Science and Specialty Products. Read more here.