German chemicals and pharmaceuticals firm Bayer will sell parts of its seeds and herbicides business to BASF for €5.9bn (£5.2bn) as it pares down assets ahead of its takeover of Monsanto.
BASF, the world’s third-largest maker of crop chemicals, will buy selected crop science businesses that generated net sales of €1.3bn in 2016. Assets to be sold include essentially all of the company's field crop seeds businesses and its glufosinate-ammonium business and related herbicide technology LibertyLink, Bayer said.
The EU has opened an in-depth investigation into Bayer's proposed $66bn (£50bn) takeover of US seeds group Monsanto over competition concerns.
"We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction,” said Bayer's chairman Werner Baumann.
“At the same time, we are pleased that, in BASF, we have found a strong buyer for our businesses that will continue to serve the needs of growers and offer our employees long-term prospects.”
The transaction is subject to regulatory approvals and the successful closing of Bayer's acquisition of Monsanto.
Under the agreement, more than 1,800 employees will be transferred to BASF, which has committed to maintaining all permanent positions for at least three years.
Bayer said it continues to work with the relevant authorities with the aim of closing the planned acquisition of Monsanto by early 2018.
Kurt Bock, chairman of BASF, said:
With this acquisition, we are seizing the opportunity to purchase highly attractive assets in key row crops and markets.
We look forward to growing these innovative and profitable businesses and to welcoming the experienced and dedicated team in crop protection, seeds and traits.