FRANKFURT, Germany (Reuters) — Bayer has agreed to sell its Liberty herbicide and LibertyLink-branded seed businesses to win antitrust approval for its acquisition of Monsanto.
The divestment of the two global brands, a requirement imposed by South Africa’s Competition Commission, will account for the bulk of asset sales, worth about $2.5 billion, which need to be made to satisfy competition regulators looking at the US$66 million Monsanto deal, sources close to the matter have said.
“Bayer has agreed to these conditions and is evaluating how best to execute the imposed divestiture,” the company said.
It would not comment on revenues, number of affected staff or the value of the assets.
While South Africa is a relatively small market for the two global agricultural supply giants, the move marks the first time that Bayer has acknowledged it has to sell the two related Liberty brands, which compete with Monsanto’s Roundup and Roundup Ready seeds.
The planned divestitures are also widely expected to be required by competition regulators in larger jurisdictions, such as the United States, where approval has been requested, and the European Union, where an application for approval has yet to be made.
“Bayer will continue working with regulators globally with a view to receiving approval of the proposed transaction by the end of 2017,” the company said, reaffirming an earlier goal.
LibertyLink seeds, mainly used by soybean, cotton and canola growers, are an alternative to Roundup Ready seeds for farmers suffering from weeds that have developed resistance to glyphosate, which is the main ingredient in Roundup.
The spread of Roundup-resistant weeds in North America has been a major driver behind Liberty sales.
Monsanto, for its part, has re-sponded by combining Roundup with older dicamba herbicide to finish off glyphosate-resistant weeds and developing seed varieties tolerant of the combined two herbicides.
As part of a global investment drive worth hundreds of millions of dollars to double the global output capacity of Liberty since 2013, Bayer has built a production plant in Mobile, Alabama, to complement a facility in Frankfurt, Germany.