MON Monsanto Company (delisted)

By Brent Kendall 

WASHINGTON -- The Justice Department granted antitrust approval Tuesday to Bayer AG's planned acquisition of Monsanto Co., after requiring the German company to sell off about $9 billion in assets in order to preserve competition.

The department said the Bayer assets, which are being sold to chemicals rival BASF SE, amount to the largest divestiture ever in a U.S. merger-approval settlement. The acquisition was originally valued at more than $60 billion.

"American farmers and consumers will continue to benefit from competition in this industry," Justice Department antitrust chief Makan Delrahim said.

The approval clears one of the last remaining regulatory hurdles for the Bayer-Monsanto transaction, one of three recent megadeals that have reshaped the global market for crop seeds and chemicals. Last year Dow Chemical Co. and DuPont Co. merged, while China National Chemical Corp. acquired Swiss seed and pesticide maker Syngenta AG.

Mr. Delrahim said BASF "has the experience, financial capabilities and the know-how to fully replace Bayer as a competitor."

The settlement requires Bayer to sell off its businesses that have competed directly with St. Louis-based Monsanto and other assets designed to boost BASF as a future innovator.

Among the divestitures to BASF, Bayer will sell its cotton, canola, soybean and vegetable seed businesses, as well as its Liberty herbicide business, which has been a competitor to Monsanto's Roundup product. Bayer is selling off some intellectual property and research-and-development capabilities, as well as its digital agriculture business, which provides data-driven farming advice and services.

The Justice Department said that without the divestitures, the merger would have suppressed competition for an array of seed and crop protection products, leading to higher prices and few choices.

The department said the asset sales also address antitrust concerns about vertically integrating Monsanto's seeds with Bayer's chemical seed treatments, both of which are important to farmers.

Bayer, a pharmaceutical and chemical conglomerate, is a leading player in the pesticide industry, while Monsanto is a market leader in seeds and crop genes. The deal, which was announced in September 2016, would make Bayer the world's biggest supplier of pesticides and seeds for farmers.

Bayer said it has received "almost all" regulatory clearances to close the transaction and expects to receive any outstanding approvals "very shortly."

The company has won antitrust approval from the European Union after pledging similar asset sales.

Bayer Chief Executive Werner Baumann said, "Receipt of the DOJ's approval brings us close to our goal of creating a leading company in agriculture."

BASF said it was "delighted" with the Justice Department's approval, while Monsanto said Tuesday's clearance by U.S. authorities "is another important step as we work to close the deal."

The Wall Street Journal reported last month that the Justice Department and the companies had reached an agreement that would allow approval of the merger.

The settlement marks the second major merger decision for the department's antitrust division under Trump administration leadership. The Justice Department last November filed a lawsuit to block AT&T Inc.'s acquisition of Time Warner Inc.

In negotiations before the lawsuit, the department sought asset sales from AT&T, but the company believed no divestitures should be required to win approval to buy Time Warner. A federal judge is expected to issue a decision by June 12 on whether to allow the deal.

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

May 29, 2018 17:58 ET (21:58 GMT)

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