29 October 2002
Bayer divests crop chemicals to BASF
Leverkusen, Germany – Bayer AG is selling several insecticides and fungicides businesses to rival BASF AG in a deal worth US$1.16 billion. The divestment was imposed by European and U.S. regulators following this summer's takeover by Bayer of agrochemicals producer Aventis CropScience.
Bayer said it intends to sell the package of selected insecticides and fungicides to BASF AG while retaining certain back-licenses for non-agricultural applications. The EUR 1.30 billion package takes into consideration the back-licenses. The actual cash purchase price amounts to EUR 1.18 billion (US$1.21 billion), Bayer said.
"With the completion of the envisaged transaction, Bayer CropScience would fulfill within the given timeframe a major condition imposed by the European Commission and the U.S. Federal Trade Commission (FTC) as part of the Aventis CropScience acquisition," Bayer said in a statement. The BASF transaction also is subject to the approval by the European Commission and FTC.
As planned, BASF would buy assets and rights related to two insecticides (active ingredients: Fipronil, Ethiprole) and a number of fungicides (active ingredients: Prochloraz, Iprodione, Triticonazole, Fluquinconazole and Pyrimethanil) for certain regions and application fields. BASF would also acquire the Aventis CropScience manufacturing plant in Elbeuf, France. The total revenue from the products and operations involved in the transaction amounted to about EUR 500 million (US$510 million) in 2001, Bayer said.
"After the sale of these products, Bayer CropScience can now focus entirely on developing its business and expanding its market position," said Werner Wenning, Bayer chairman. "Cash-in from the sale also contributes to improving the group's financials, as does the cash inflow from the other divestments we have already announced."
Said BASF chairman Jochen Wulff: "The purchase price agreed represents a fair compensation for the required divestments. I am also pleased that we were able to retain license rights to market Fipronil and its mixtures in certain non-agricultural markets within the scope of the FTC consent order. The integration of the Aventis CropScience operations is moving ahead quite rapidly and we continue to focus our efforts on the further integration and strategic development of the new Bayer CropScience.
Bayer completed its EUR 7.25 billion (US$7.07 billion) takeover of Aventis CropScience in June. It now ranks second to Syngenta of Switzerland as a supplier of farm chemicals and seeds.
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