GERMAN chemical group, BASF, is set to acquire significant parts of Bayer’s seed and non-selective herbicide businesses for €5.9 billion (AUD$8.85 billion).
Bayer intends to divest these assets in the context of its planned acquisition of Monsanto.
It will also include 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 (AUD$1.9 billion) and EBITDA to around €385 million (AUD$578 million).
The transaction is subject to the closing of Bayer’s acquisition of Monsanto and approval by relevant authorities. It is expected to close in the first quarter of 2018.
“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,” BASF SE Board of executive directors chair, Dr Kurt Bock, said.
“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,” BASF SE Board of executive directors member, Saori Dubourg, said.
“Moreover, this transaction will create new opportunities for future growth and strengthen our global innovation potential.”
More than 1800 commercial, R&D, breeding and production personnel shall transfer from Bayer to BASF.
These employees are primarily located in the United States, Germany, Brazil, Canada and Belgium.
BASF will acquire the manufacturing sites for glufosinate-ammonium production and formulation in Germany, the United States, and Canada, seed breeding facilities in the Americas and Europe as well as trait research facilities in the United States and Europe.