Possible buyers of Clearfield canola identified

Federal Competition Bureau asks BASF to sell the canola crop protection system after it buys LibertyLink from Bayer

BASF has agreed to sell its Clearfield production system for canola in order to appease the federal Competition Bureau, and there will likely be a number of suitors for the assets.

The bureau determined BASF would have had too much control over the Canadian canola seed business after its purchase of Bayer’s LibertyLink assets if it also got to keep its Clearfield system.

Bayer was forced by regulators to jettison one of its herbicide tolerant systems as part of its purchase of Monsanto. The company decided to sell the LibertyLink system to BASF and keep Monsanto’s Roundup Ready system.

According to the bureau, 55 percent of the canola seeds sold in Canada contain Bayer’s LibertyLink trait, 40 percent has Monsanto’s Roundup Ready trait and five percent contains BASF’s Clearfield trait.

The bureau was concerned the loss in rivalry would have resulted in higher canola seed prices, increased herbicide costs, higher fees for companies licensing the Clearfield trait and reduced investment in breeding canola varieties containing the Clearfield trait.

“Today’s agreement with BASF is necessary to protect competition and innovation in this important industry following Bayer’s recent acquisition of Monsanto,” interim commissioner of competition Matthew Boswell said in a news release.

BASF has agreed to sell its North American business related to the breeding, marketing and sale of Clearfield canola seeds as well as the sale in Canada of imazamox/imazapyr herbicides sold under the Ares and Tensile brands.

Stuart Smyth, assistant professor at the University of Saskatchewan’s college of agriculture, thinks there could be a number of suitors for the Clearfield assets.

The Clearfield trait has been licensed to many seed companies, including BrettYoung Seeds Ltd., Canterra Seeds, Corteva Agriscience and Nutrien.

Smyth thinks Corteva, which is the agriculture division of DowDuPont, could be a good candidate.

“That is the one that would come to mind if it was going to stay with one of the bigger multinationals,” he said.

He believes Corteva is going to want to make a big splash and capture more market share in the canola sector.

Cargill is another company that immediately comes to mind for Smyth, in part because the Clearfield trait has been deemed by government regulators to be a non-genetically modified trait.

“Cargill has a long record of not bringing GM varieties in house, and this might really fit well with the Cargill suite of oilseeds,” he said.

Cargill boasts on its corporate website that it has the “broadest portfolio” of non-GM ingredients in the food business.

“Looking at their crush capacity, they may want to do a little bit more vertical integration there,” said Smyth.

A third option could be a bid by a group of three or four smaller seed companies, depending on what BASF is asking for its Clearfield canola assets.

“There’s no reason why they couldn’t come together and form a joint venture just for this and then roll it out into their own varieties,” he said.

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