Bayer cleared one big hurdle for its $66 billion takeover of Monsanto, winning European Union approval for the deal after agreeing to bolster BASF SE by selling it seeds, pesticides and digital agriculture technology.
Bayer and BASF “need to provide further evidence” of BASF’s ability and incentives to build the business into an important competitor for BASF to obtain approval to buy the more than $7.4 billion package, the EU said.
The EU didn’t specify a buyer for Bayer’s vegetable-seeds unit. Bayer has suggested BASF should take it over.
The companies’ concessions allayed the EU’s antitrust “concerns in full,” said EU Competition Commissioner Margrethe Vestager. “We have made sure that the number of global players actively competing in these markets stays the same.
“That is important because we need competition to ensure farmers have a choice of different seed varieties and pesticides at affordable prices.”
Monsanto has facilities in Eastern Iowa.
The deal is the last of three big agricultural transactions that are reshaping global farming. DuPont had to sell most of its global research-and-development operations to placate EU concerns over its merger with Dow Chemical Co. last year. China National Chemical Corp. also divested some overlapping products to win approval for its Syngenta bid.
Bayer said it’s still aiming to complete the deal by the end of the second quarter. The company said it’s working closely with the U.S. Department of Justice.