Bayer close to conclusion of Monsanto takeover after gets U.S. regulatory approval

BERLIN, May 30 (Xinhua) -- Bayer AG cleared a critical regulatory hurdle in its takeover of U.S. agrochemical firm Monsanto by winning approval from local antitrust authorities, the German chemicals company told press on Wednesday.

Chief executive officer Werner Baumann confirmed that regulators in the European Union (EU), China, Brazil, Russia and the U.S. had now all approved the Bayer-Monsanto merger, leaving Mexico and Canada as the final jurisdictions where decisions were still pending.

"With the approval of the (U.S.) Department of Justice we are now close to the finishing line," a statement by Baumann read.

Bayer will become the world's largest producer of seeds, pesticides and herbicides following the acquisition of Monsanto for 62.5 billion U.S. dollars with combined gross revenue of 23 billion euros (26.75 U.S. dollars) recorded from agriculture-related business alone.

A spokesperson for the Leverkusen-based company noted that the volume and character of divestments promised to U.S. authorities to allay their antitrust concerns were in line with announcements made earlier.

In order to meet regulatory requirements, Bayer has already agreed to sell business units with combined revenue of 2.2 billion euros to German rival BASF. The U.S. Department of Justice accepted this step as being sufficient to prevent Bayer-Monsanto from becoming too dominant in any of the markets of the merged entity.

The final volume of divestments is higher than initially anticipated by Bayer when it launched its takeover bid, forcing the firm to downgrade its estimate for resulting synergy effects from 1.5 billion euros to 1.2 billion euros per year. Nevertheless, Baumann defended the transaction at Bayer's recent annual general meeting as being "just as attractive today" as it did at the start of the acquisition process.

Meanwhile, the EU Commission has chosen to recognise BASF as the appropriate buyer for all of Bayer's divested units. The formal integration of Monsanto into the corporate structure of Bayer can only commence under U.S. regulatory requirements once the Bayer-BASF deal is complete. Bayer expects to finalize this process within two months.

The Bayer-Monsanto merger is not just the largest ever acquisition made in Bayer's history but also the most expensive foreign takeover ever conducted by a German company in general. The company is seeking a capital increase to finance the deal and has recently succeeded in attracting the Singaporean sovereign wealth fund Temasek as a new major investor.

Founded in 1863, Bayer is one of the world's largest chemicals manufacturers and employs over 99,000 staff across the world. The publicly-listed company recorded annual gross revenue of 35 billion euros in 2017. Enditem