U.S. Conditionally Approves Bayer's Proposed Acquisition Of Monsanto

(RTTNews) - German conglomerate Bayer AG (BAYZF.PK, BAYRY.PK, BYR.L) said that it obtained conditional approval from the Antitrust Division of the United States Department of Justice for the proposed acquisition of Monsanto.

Bayer said it has now obtained almost all clearances which are conditions for closing the transaction. The company expects to receive any outstanding approvals required for completing the transaction very shortly.

Bayer noted that it will become the sole shareholder of Monsanto Company following the receipt of outstanding approvals. According to the DOJ's conditional approval, the integration of Monsanto into Bayer can take place as soon as the divestments to BASF have been accomplished. This is expected to be in approximately two months.

Separately, the U.S. Department of Justice announced that it is requiring Bayer AG to divest businesses and assets collectively worth about $9 billion in order to proceed with its proposed $66 billion acquisition of Monsanto Company. The proposed divestiture to BASF, an experienced chemical company with a substantial crop protection business, will fully resolve all horizontal and vertical competition concerns.

The Department's Antitrust Division today filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed transaction while simultaneously filing a proposed settlement that, if approved by the court, would resolve the Department's competitive concerns.

Under the terms of the proposed settlement, Bayer must divest those Bayer businesses that compete with Monsanto today. These include Bayer's cotton, canola, soybean, and vegetable seed businesses, as well as Bayer's Liberty herbicide business, a key competitor of Monsanto's well-known Roundup herbicide.

The settlement also requires structural divestitures to remedy the competitive harm that would result from the vertical integration of certain significant Bayer seed treatment businesses with Monsanto's leading seed businesses. Additionally, because Bayer and Monsanto currently compete to develop new products and services, the settlement requires the divestiture of certain intellectual property and research capabilities, including "pipeline" R&D projects.

The settlement requires the divestiture of additional complementary assets that are needed to ensure that BASF has the same innovation incentives, capabilities and scale that Bayer would have as an independent competitor including, most notably, Bayer's nascent "digital agriculture" business.

The settlement also includes, consistent with other settlements in this Administration, several provisions designed to improve the effectiveness of the decree and the Division's future ability to enforce it.