Bayer gets the green light from the USA to the redemption of Monsanto

by Patricia Weiss and Diane Bartz

FRANKFURT/WASHINGTON (Reuters) – Bayer (DE:BAYGN) received on Tuesday the approval of the us competition authorities to buy the specialist seed Monsanto (NYSE:MY), which eliminates a significant barrier to the achievement of this operation 62.5 billion (54,11 billion euros).

This green light in the United States is one condition, said the department of Justice (DoJ): that the German chemical company assigns for about nine billion dollars of assets.

The divestments demanded by the american authorities “overlap closely” than those requested by the european Union, said a source with knowledge of the agreement entered into between Bayer and the u.s. government.

Makan Delrahim, who is leading the competition services of the department of Justice, said that the disposals of assets accepted by Bayer were “the largest ever claimed by the United States”.

In the framework of agreements concluded with various competition authorities in the world, in particular with the european Commission, the German group is committed to sell all of its cotton seed, rapeseed and soybean and vegetable seeds as well as its activities in agriculture digital. It will also abandon its herbicide Liberty, competitor of Roundup from Monsanto.

Bayer will sell to his competitor and compatriot BASF (DE:BASFN) of the assets generating $ 2.2 billion of turnover. He said Tuesday that the european Commission had given its green light to these transfers.

Before the United States, it had already obtained the approval of the european Union, Brazil and Russia. It still lacks those of Canada and Mexico.

If the transaction is not closed by June 14, Monsanto may terminate the agreement and seek a better price.

Bayer said on Tuesday is expected to get final clearances in a very short time.

“The agreement with the DoJ brings us closer to our goal of creating a group leader in agriculture,” responded the president of the management board of Bayer, Werner Baumann, in a press release.

The German group expects that the process of integration of Monsanto begins as soon as the sales of BASF have been carried out, which should take two months, according to its estimates.

He announced last week that the expected synergies from the acquisition of Monsanto would be lower by approximately $ 300 million to his previous goal because of the need to transfer more assets than it initially planned.

(With Ludwig Burger; Bertrand Boucey for French service, edited by Wilfrid Exbrayat)