Date
26 May 2017
Bayer is expected to potentially divest soybean, cotton and canola seed assets as well as LibertyLink-branded crops. Photo: Reuters
Bayer is expected to potentially divest soybean, cotton and canola seed assets as well as LibertyLink-branded crops. Photo: Reuters

Bayer, Monsanto begin asset sale to get merger clearance

German drug and crop chemical maker Bayer and US seeds company Monsanto are launching asset sales worth roughly US$2.5 billion as they seek regulatory clearance for their US$66 billion merger, Reuters reports, citing people close to the matter.

To kick off an auction process, Bayer’s advisers will send out information packages next week to prospective bidders for the businesses, which have been divided into three bundles of assets, the people said.

Bayer and Monsanto have said in the past that they expect to divest activities with combined sales of up to US$1.6 billion.

While it could not be learned what businesses will be put on the auction block, antitrust and industry experts expect Bayer to potentially divest soybean, cotton and canola seed assets as well as LibertyLink-branded crops that are resistant to its glufosinate herbicide, an important alternative to Monsanto’s Roundup Ready seeds.

Overall, regulatory hurdles to the deal are seen as manageable because Bayer’s main business in agriculture is pesticides while Monsanto’s focus is on genetically modified seeds.

Bayer said last month that it was on track to clear all regulatory hurdles for the takeover by year-end, including a likely in-depth investigation by the European Union’s competition regulators.

Peer BASF has been touted as a potential buyer of some of the assets after abstaining from a wave of consolidation in the agrochemicals industry, which also saw Dow and DuPont merging and ChemChina buying Syngenta.

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