BASF in talks to buy Bayer's vegetable seeds business

German chemicals maker BASF is in talks with drugmaker Bayer to buy its vegetable seeds business, which is valued at around 1.5 billion euros ($1.85 billion) including debt, two people familiar with the matter said.

BASF is exclusively conducting due diligence on the business, the people said, after Bayer offered to sell it to help assuage regulators’ objections to its $63.5 billion purchase of Monsanto. 

However, Bayer may still open its books to others at a later stage, one of the sources said.

“BASF has responded to the market test questionnaire issued by the EU Commission on Bayer’s draft commitments,” a BASF spokeswoman said referring to a questionnaire which invited stakeholders to provide information on Bayer’s concessions.

“We are now carefully evaluating any remedy assets from the Bayer/Monsanto transaction that show a strategic and economic fit for BASF,” she added. Bayer did not immediately respond to requests for comment.

Bayer’s vegetable seeds business, which operates under the brand Nunhems, has more than 1,200 seed varieties in 25 vegetable crops.

Bayer had offered to divest the business as a unit including its intellectual property rights, locations and production sites to a new entrant in a move that rules out bids from private equity firms, Reuters reported in February.

Bayer clinched a deal in October last year to sell its seed and herbicide businesses to BASF for 5.9 billion euros.

Reuters reported on Wednesday that Bayer was set to win conditional European Union antitrust approval for the mammoth acquisition.