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US approves Bayer’s takeover of Monsanto

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World Fertilizer,

According to Reuters, Bayer’s planned takeover of Monsanto has been approved by the US.

Reuters reports that this comes after the company agreed to sell approximately US$9 billion in assets, clearing a major hurdle for the US$62.5 billion deal, which will reportedly create one of the world’s biggest seeds and pesticides producers.

According to Makan Delrahim, who heads the US Justice Department’s (DoJ) Antitrust Division, the asset sales agreed to by Bayer were the “largest ever divestiture required by the United States.”

A spokesman for the company reportedly stated the planned sale of businesses with €2.2 billion in sales to BASF already agreed to address antitrust concerns, largely in Europe, were not different materially from the demands of the DoJ.

Reuters reports that this ruling has come after months of delays in a long review process. It brings Bayer closer to establishing a giant agricultural supplies company with sales of approximately €20 billion, based on 2017 figures when taking the divestments into account. At current exchange rates, Reuters reports that this compares to approximately €12.4 billion at DowDuPont’s Corteva Agriscience unit, €11 billion at ChemChina’s Syngenta and €7.9 billion at BASF, including businesses to be acquired.

Under the terms of agreements with both European and other antitrust enforcers, Bayer will sell assets with revenues of €2.2 billion to BASF for €7.6 billion. In a statement, Bayer reportedly claimed that it expects to commence the integration process with Monsanto once the sales to BASF are complete. This is expected to take approximately two months to finalise. According to Reuters, Monsanto could withdraw from the takeover agreement and look for a better price if Bayer does not close the deal by 14 June 2018.

The takeover has already been granted approval from a number of key jurisdictions (EU, Brazil, Russia, the US). However, it still requires clearance in both Mexico and Canada.

According to Reuters, Bayer – in another statement – recently stated that BASF has been approved by the European Commission as a suitable buyer of the businesses to be divested. Just last week, Bayer reportedly claimed that synergies from folding Monsanto into its company would be approximately US$300 million below its earlier target, due to the fact it will have to sell more businesses than it originally thought.

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