Bayer selling units to complete Monsanto takeover

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"We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction", said Bayer's chairman Werner Baumann.

Bayer, the Leverkusen-based multinational that specializes in pharmaceuticals and chemicals, recently agreed a €56 billion takeover of United States seeds company Monsanto and the deal with BASF is part of their plan to divest themselves of assets in order to fund the Monsanto deal and improve their chances of gaining regulatory approval.

The EU has opened an in-depth investigation into Bayer's proposed $66bn (£50bn) takeover of USA seeds group Monsanto over competition concerns.

It also noted that both firms have large market shares in vegetable seeds and several field crops where their products compete against one another.

It said it would use the proceeds of the sale to partially refinance the planned acquisition of Monsanto, which it still hopes will close in early 2018.

The deal is contingent upon the completion of Bayer's acquisition of Monsanto, but the takeover still faces scrutiny from European regulators.

Under the agreement, more than 1,800 employees will be transferred to BASF, which has committed to maintaining all permanent positions for at least three years.

It would be the first move for BASF into selling seeds genetically modified to be resistant to pesticides or harsh conditions, especially profitable when offered alongside the compatible chemicals.

"BASF needed to buy a seeds business", Jeremy Redenius, an analyst, told Bloomberg.

The deal "solves a puzzle for both sides, it's definitely a win-win scenario", although BASF is paying a "very high" price for "the biggest acquisition in its history", he added.

BASF, the world's third-largest maker of crop chemicals, has so far avoided seed assets and instead pursued research into plant characteristics such as drought tolerance, which it sells or licenses out to seed breeders.

"With this investment, we are seizing the opportunity to acquire highly attractive assets in key row crops and markets".

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