SINGAPORE (ICIS)--BASF is acquiring major parts of Bayer’s seed and non-selective herbicide businesses in an all-cash deal worth €5.9bn, the German chemical majors said on Friday.
The transaction is expected to close in the first quarter of 2018 and is subject to the closing of Bayer’s acquisition of Monsanto as well as the approval by relevant authorities, BASF said in a statement.
In a separate statement, Bayer said it will use net proceeds from the divestment “to partially refinance the planned acquisition of Monsanto”.
BASF said the assets to be acquired include Bayer’s global glufosinate-ammonium non-selective herbicide business commercialised under the Liberty, Basta and Finale brands, as well as its seed businesses for key row crops in select markets.
This includes 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 as well as soybean in the Americas, BASF said.
The transaction also includes Bayer’s trait research and breeding capabilities for these crops and the LibertyLink trait and trademark, the company said.
More than 1,800 commercial, R&D, breeding and production personnel are expected to be transferred from Bayer to BASF. These employees are primarily located in the US, Germany, Brazil, Canada and Belgium, the company said.
“Furthermore, BASF will acquire the manufacturing sites for glufosinate-ammonium production and formulation in Germany, the US, and Canada, seed breeding facilities in the Americas and Europe as well as trait research facilities in the US and Europe,” it added.
BASF said the businesses to be purchased from Bayer generated sales of €1.3bn in 2016, with earnings before interest, tax, depreciation and amortisation (EBITDA) of around €385m.
“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,” it added.