Bayer said it will sell its digital farming business to BASF as part of an agreement with regulators to receive approval of its acquisition of Monsanto, which is expected to be finalized in the second quarter of this year.
In a statement Wednesday, the German company said the digital farming operation would be sold, not outlicensed, "and Bayer in return will receive a license back to certain digital farming applications." Last month, the European Commission said it had conditionally approved the acquisition but that it was separately "assessing whether the sale to BASF itself raises any competition concerns" and would issue a decision on that by April 16, a deadline that has since been extended to April 30.
One of the agreed-upon conditions was that Bayer would license its digital farming products to another company. But the Justice Department's reported approval of the deal earlier this week apparently forced Bayer to agree to sell its digital farming assets instead of licensing them, according to a Reuters report today.
Bayer also said it would retain Monsanto's NemaStrike but would sell other Bayer seed treatment products to BASF. In October, Bayer agreed to sell its global glufosinate-ammonium non-selective herbicide business, commercialized under the Liberty, Basta and Finale brands, as well as its seed businesses for key row crops in select markets, to BASF for about $7 billion.
Here is Bayer's full statement:
"In connection with the proposed acquisition of Monsanto, we confirm that – other than was previously communicated – certain Bayer seed treatment products will be offered for sale instead of Monsanto’s NemaStrike. In addition, Bayer’s digital farming business is to be sold rather than outlicensed, and Bayer in return will receive a license back to certain digital farming applications. BASF is the intended purchaser of all these assets. These changes have been made in response to corresponding indications from regulators. Please appreciate that we are unable to provide any further details. The proposed acquisition of Monsanto remains subject to customary closing conditions, including receipt of required regulatory approvals. Bayer and Monsanto are working closely with the authorities with the goal of closing the transaction in the second quarter of 2018."
Bayer and St. Louis-based Monsanto announced the planned merger, whose value is estimated between $62.5 billion and $66 billion, in September 2016.
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