Bayer has won US approval for its planned takeover of Monsanto after agreeing to sell about $9 billion in assets, clearing a major hurdle for the $62.5 billion deal that will create by far the largest seeds and pesticides maker.
Makan Delrahim, who heads the US Justice Department’s (DoJ) Antitrust Division, said the asset sales agreed to by Bayer were the “largest ever divestiture ever required by the United States.”
A Bayer spokesman said the planned sale of businesses with €2.2 billion in sales to BASF already agreed to address antitrust concerns, mainly in Europe, were not materially different from the DoJ’s demands.
“Receipt of the DoJ’s approval brings us close to our goal of creating a leading company in agriculture,” Bayer CEO Werner Baumann said in a statement.
Shares in Bayer jumped to the top of Germany’s DAX index in early Wednesday trading and were trading up 2.8 per cent at €101.6.
Bernstein analysts said the DoJ approval made it possible for Bayer to close the Monsanto deal by the end of June.
After months of delays in a drawn-out review process the ruling brings Bayer close to creating an agricultural supplies giant with sales of about 20 billion euros, based on 2017 figures, when taking into account the divestments.
At current exchange rates, that compares to about €12.4 billion at DowDuPont’s Corteva Agriscience unit, €11 billion at ChemChina’s Syngenta and €7.9 billion at BASF, including businesses to be acquired.
Bayer’s move to combine its crop chemicals business, the world’s second-largest after Syngenta AG, with Monsanto’s industry-leading seeds business, is the latest in major agrochemicals tie-ups.
Under agreements with European and other antitrust enforcers, Bayer agreed to sell assets with revenues of €2.2 billion to rival BASF for €7.6 billion.
Bayer said in a statement it expected Bayer and Monsanto to begin the integration process as soon as the sales to BASF are complete, which it said are expected to take two months to complete.
If Bayer does not close the deal by June 14, Monsanto could withdraw from the takeover agreement and seek a higher price.