Basf signed an agreement to further acquire bayer's seed and crop protection business and assets

date of issue:2019-08-02     Source: Agrow
On April 26, 2018, there is a basf signed an agreement to further acquire the businesses and assets bayer intends to divest in order to complete bayer's planned acquisition of monsanto after the acquisition agreement signed in October 2017. The additional business scope includes: all the vegetable seed business operations owned by bayer global trademark Nunhems ®, seed treatment products under sales of the Poncho ®, VOTiVO ®, COPeO ® and ILeVO ® brand, Hybrid wheat research and development platform, and a full set of advanced digital agriculture platform xarvioTM.

The deal also includes bayer's canola business in Australia. Part of the glyphosate herbicide business in Europe is primarily used for industrial applications, studies on the texture of rapeseed and mustard, part of a non-selective herbicide and nematode killer research project.

research project

The business scope of this additional purchase includes a full set of advanced digital agriculture platform xarvioTM. The total cash purchase price for this part of basf's agreed business and assets is 1.7bn and could be adjusted at the end of the deal. For the whole of 2017, sales in this segment were about 745 million euros.
 
The acquisition is a further step after basf and bayer signed an agreement on October 13, 2017. The previous acquisition involved bayer's global non-selective herbicide business, key field of crop seed business, research and breeding ability and character LibertyLink ® traits and trademark. The business had total sales of 1.5 billion euros in 2017, compared with a previously agreed all-cash acquisition price of 5.9 billion euros, which could be adjusted when the deal closes.

Field crop seed

The deal also includes vegetable seed business, some seed processing business and hybrid wheat research and development platform. The combined sales of the two businesses were 2.2 billion euros in 2017 and 2 billion euros in 2016. These businesses will complement basf's existing crop protection and biotechnology businesses, adding new business capabilities and new opportunities for profitable growth and innovation. The combined cash purchase price for the two deals is 7.6bn and could be adjusted at the end of the deal. Total earnings before interest, tax, depreciation and amortization were 550 million euros in 2016 (adjusted for reference purposes).

Dr. Peter potts, as a member of the executive board of European companies, said through this acquisition, basf further strengthened its crop protection portfolio and entered the seed business in key agricultural markets, becoming the better partner of farmer households. By expanding its business scope, basf is accelerating its development and laying a broad and solid foundation for growth in all regions of the world. Dong Shanli, a member of the executive board of European companies, responsible for the business area of agricultural solutions, said that this is another important milestone for basf to consolidate its future market position in the agricultural sector. We are looking forward to the participation of new colleagues to actively promote the future growth of the company. Our customers will benefit from more balanced and innovative products and solutions, and they will have more choices and their businesses will be more successful.

Markus Heldt, president of crop protection operations, said that Basf's expanded product portfolio covers seeds and traits, chemical and biological crop protection, soil and plant health, and digital agricultural applications and we have more tools to support farmers. When the deal closes, basf's crop protection business will have more than 12,000 experienced employees being active in the agricultural sector. They combine innovative thinking with practice to help our customers increase yields, improving crop quality and increase yields.

All deals are subject to bayer's acquisition of monsanto, which are expected to close in the second quarter of 2018. The businesses and assets that basf plans to acquire are assets that bayer intends to divest under the framework of its planned acquisition of monsanto, which still needs to be approved by the relevant merger and acquisition regulators.
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