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BASF to Buy LibertyLink and Other Assets from Bayer

The all-cash purchase price is for €5.9 billion ($6.97 billion)

BASF has signed an agreement to acquire Bayer’s LibertyLink technology and other significant parts of Bayer’s seed and nonselective herbicide businesses.

It's all part of a divestment Bayer wants to make for its planned acquisition of Monsanto, now slated to close first quarter 2018.

The all-cash purchase price is €5.9 billion ($6.97 billion), subject to certain adjustments at closing.

Assets to be acquired outlined in a BASF news release include:
• Bayer’s global glufosinate-ammonium nonselective herbicide business, commercialized under the Liberty, Basta, and Finale brands
• 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
• Soybean in the Americas

The transaction also includes Bayer’s trait research and breeding capabilities for these crops and the LibertyLink trait and trademark.

Why It Happened
There’s been speculation about whether Bayer would divest the LibertyLink system since its intent to buy Monsanto was announced last year. Even if significant anticompetitive issues between glyphosate and glufosinate were lacking, it was possible that Bayer will divest LibertyLink to proactively address concerns related to control of both Roundup Ready and LibertyLink.

Last month, Liam Condon, president of Bayer CropScience, said during the merger talks with Monsanto, there was a divestment calculation made tallying $1.6 billion. 

“The $1.6 billion was a calculation we did basically looking at the overlap between the two companies, and what would be the maximum amount (of assets) to sell to get the deal done,” he said. The $6.97 billion sale price exceeds that threshold.

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,” said Kurt Bock, chairman of the board of executive directors of BASF SE, in a news release. “The acquisition will further enhance our agricultural solutions offer, which is a core pillar of BASF’s portfolio.”

BASF officials say 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,” explained Saori Dubourg, member of the board of executive directors of BASF SE and responsible for the Agricultural Solutions segment in a news release

More than 1,800 commercial, R&D, breeding, and production personnel shall transfer from Bayer to BASF. These employees are primarily located in the U.S., Germany, Brazil, Canada, and Belgium. 

What Bayer Says
"We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction," explained Werner Baumann, chairman of the board of management of Bayer AG in a Bayer news release. "At the same time, we are pleased that, in BASF, we have found a strong buyer for our businesses that will continue to serve the needs of growers and offer our employees long-term prospects. We are very grateful to our employees, who have played a key role in the success of these businesses over the years," said Baumann. "At the same time, we are aware of the need to address certain overlaps in the combined product portfolio of Bayer and Monsanto." Bayer continues to work diligently with the relevant authorities with the aim of closing the planned acquisition of Monsanto by early 2018. 
Bayer will continue to own, operate, and maintain these businesses until the closing of this divestiture, according to the Bayer news release. After the closure of the planned Monsanto acquisition, Bayer will continue to be active in these same areas as a result of Monsanto’s current programs, products and offerings.

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