ROCKVILLE, Md. (DTN) -- The European Commission has approved Bayer's purchase of Monsanto on the condition both companies spin off additional assets.
Monsanto has agreed to divest its NemaStrike technology, and Bayer will divest its hybrid wheat portfolio, according to a Bayer press release. Bayer has also agreed to transfer three herbicide research projects and the license to its digital farming portfolio to BASF.
These new agreements follow a host of Bayer divestments for the deal, with BASF as the primary beneficiary. Just last month, Bayer agreed to sell its vegetable seed business to BASF, and in 2017, they agreed to sell a number of crop-science businesses to BASF for nearly $7 billion. Those sales include Bayer's LibertyLink soybean technology and the company's corresponding glufosinate-ammonium business, as well as most of Bayer's cotton business (excluding India and South Africa), and its canola seed holdings in North America and Europe.
"We have approved Bayer's plans to take over Monsanto because the parties' remedies, worth well over 6 billion euro [$7.4 billion USD], meet our competition concerns in full," EU Antitrust Commissioner Margrethe Vestager said in a press release. "Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger."
The EU approval is an important step forward for the Bayer-Monsanto deal, now valued at $57 billion. "Bayer has now received approvals for the transaction from substantially more than half of the some 30 regulatory authorities, including those in Brazil and China," Bayer reported.
The U.S. Department of Justice is still scrutinizing the deal, but Bayer hopes to close the transaction in the second quarter of 2018.
The requirement to sell Monsanto's NemaStrike business comes at an awkward time for the technology, which uses seed treatments to target nematodes in corn, cotton and soybeans. Monsanto pulled the technology off the market in 2017 due to safety concerns.
"There have been limited cases of skin irritation, including rashes, that appear to be associated with the handling and application of this seed treatment product," Monsanto said in a statement on its decision to delay commercialization. "We are evaluating these cases, and in those we've examined so far, the proper use of required personal protective equipment (PPE) appears to be an important factor."
"Out of an abundance of caution, we are pausing the 2018 commercialization of NemaStrike Technology while we evaluate the circumstances associated with these cases. We anticipate that we will continue the Ground Breakers program this spring," the company said.
Bayer's divestment of its hybrid wheat research and development is likely a disappointment to the company, which had been vocal about the benefits of combining its entire wheat portfolio with Monsanto.
See the European Commission's press release on their approval of the deal, which summarizes the deal's required divestments, here: http://bit.ly/…
See the Bayer release here: http://bit.ly/…
Emily Unglesbee can be reached at Emily.email@example.com
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