LEVERKUSEN — Pharmaceutical giant Bayer has announced it will divest from its Liberty brands crop science products in order to facilitate its acquisition of seed giant Monsanto Co.
According to a May 8 published report by Reuters, the company has agreed to sell its Liberty herbicide and Liberty- Link-branded seeds businesses to win antitrust approval for its acquisition of Monsanto, which makes and markets an analogous cropping system called Roundup, and Roundup Ready seeds.
This divestiture was reportedly required by South Africa’s relevant regulatory body; however, other countries where the company would like to operate, such as the United States, will likely require the same or similar divestiture, the article said. This will account for the bulk of asset sales worth about $2.5 bill ion, which need to be made to satisfyvarious regulators examining the Bayer/Monsanto deal.
“Bayer has agreed to these conditions and is evaluating how best to execute the imposed divestiture,” Bayer said in a statement.
According to a March 17 blog post from CropLife, a pesticide manufacturers’ association, Bayer and Monsanto say their merger should be completed by year’send. Already by March, Bayer was working on selling some of its seed lines as well as its LibertyLink cropping system, which works with glufosinate – a different chemical compound than glyphosate, the Roundup Ready chemical.
“Although many companies were touting new dicamba-resistant crops at this winter’s trade shows, LibertyLink is an established name in the agricultural market, with approximately 15 percent of the 2017 soybean crop being planted by growers expected to be this variety,” the post said.
This presumably means that Liberty- Link will be something a major company will want to own. The association’s blogger and editor, Eric Sfiligoj, said for whatever reason it made sense to Bayer that LibertyLink would be the system to be sold.
“It will be interesting to see which agricultural company steps forward to obtain LibertyLink,” Sfiligoj writes. “Although many herbicides have seen numerous weeds develop resistance to their modes of action over the years, glufosinate is currently not among them. This will give some company a valued alternative cropping system for those growers looking to fight back against herbicide-resistant weeds in their fields.”
Bayer originally announced it intended to buy Monsanto on May 23 last year, describing a possible acquisition as a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a life science company with a deepened position in a long-term growth industry.
“We have long respected Monsanto’s business and share their vision to create an integrated business that we believe is capable of generating substantial value for both companies’ shareholders,” said Werner Baumann, Bayer’s CEO.
On Sept. 14, 2016, the two companies announced they had signed a definitive merger agreement under which Bayer would acquire Monsanto for $128 per share in an all-cash transaction.
