The US Department of Justice (DOJ) has approved Bayer’s deal to buy rival Monsanto on condition it sells almost £7bn in assets.
Bayer’s $66bn (£45.5bn) controversial deal for Monsanto has raised concerns it would stifle competition as the world’s two biggest agricultural companies come together.
To allay concerns the DOJ agreed to the same terms Bayer offered to the European Commission to sell off parts of its seeds and crop chemicals business. BASF, the largest chemicals producer, will pay 7.6bn euros for those assets.
Makan Delrahim, the assistant attorney general for the DOJ’s Antitrust Division, said the asset sales agreed to by Bayer were the “largest ever divestiture ever required by the United States” and would “preserve competition.”
Bayer and Monsanto currently compete to provide farmers with a broad range of seeds and crop protection products.
Under the terms of the proposed settlement, Bayer must sells its businesses that compete with Monsanto.
These include 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.
“Without the agreed divestitures, the proposed merger would likely result in higher prices, lower quality and fewer choices across a wide array of seed and crop protection products.” the DOJ said.
Bayer’s chief executive Werner Baumann said: “Receipt of the DOJ’s approval brings us close to our goal of creating a leading company in agriculture.”
He added: “We want to help farmers across the world grow more nutritious food in a more sustainable way.”
At the time Bayer announced the deal in 2016, the German company said it expected cost savings of about $1.5bn from merging with Monsanto
The agreement with the DOJ still requires the court approval.
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