Investment of €5,9 billion
BASF continues with Bayer's seed business
BASF acquires the LibertyLink business unit from Bayer. Both parties will announce this on Friday 13 October. BASF will pay €5,9 billion for the industry, which includes Bayer's seed and herbicide business. The business is being mandatorily divested so that Bayer's acquisition of Monsanto can be given the green light.
The deal includes LibertyLink's technology, the seed division and non-selective herbicide production. For the European market this means that the cotton branch and rapeseed market will be transferred to BASF. Other products are mainly focused on North and South America. In addition to seed sales, development and breeding will also be transferred to the German chemical giant. With this BASF is entering the seed world for the first time.
5,9
billion sek
Competition in herbicide
The acquisition allows Bayer's Monsanto deal to go ahead. This is expected to take place in the first quarter of 2018. There has been speculation for some time when Bayer would sell LibertyLink. Partly because their glufosinate ammonium production is a competitor for glyphosate. After Monsanto launched Round-Up, Bayer developed its own drug. Herbicide resistant crops such as rapeseed, maize and soya were sold under the LibertyLink name. The active ingredient is used in the products Basta, Rely and Finale, among others.
Acquisition required for Monsanto deal
According to Liam Condon, president of Bayer CropScience, the overlap in products between Bayer and Monsanto is worth an estimated $1,6 billion. In addition, the maximum number of shares that could be sold was considered. The industry's sales price is well above this at $6,97 billion. The transaction can only go through if the authorities also allow Bayer to acquire Monsanto.
BASF for the first time in seed world
BASF sees it as a huge opportunity to gain more market share in the threshing crop segment. This further strengthens BASF's agricultural arm. According to chairman Kurt Bock, that is a goal. It also means that BASF is entering the seed world, in addition to crop protection products.
Bayer does everything for takeover
The takeover includes 1.800 employees who fulfill commercial functions, are involved in R&D and breeding. Branches are spread over the US, Germany, Brazil, Canada and Belgium. Bayer says it is satisfied with BASF as a buyer. “We are doing everything we can to make the Monsanto acquisition a success,” said Bayer AG Chairman Werner Baumann. Until the acquisition is official, Bayer will continue to run the industries that will be acquired. It does not shy away from competition with Monsanto.
Niels van der Boom
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