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Bayer to sell South African cotton seed business as part of Monsanto merger conditions

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The Competition Tribunal of South Africa on last Friday approved a merger between Bayer and Monsanto on the condition that the merged entity sell the Bayer South African cotton seed business.

The merged entity must also sell the entire global Liberty Link trait technology and the associated Liberty branded agrochemicals business of Bayer.

The conditions are aimed at addressing competition concerns that were identified by the Competition Commission for the supply of genetically modified cotton seeds.

The potential buyer of the divested businesses will be required to commercialise the divested products in South Africa, or alternatively, to license the divested business to a South African third-party to commercialise.

Bayer is active in the crop protection business in South Africa, selling fungicides, insecticides, herbicides and seed treatment products.

Monsanto is active in the supply of seeds, biotechnology traits and herbicides in South Africa.

Both companies are also involved in research and development for biotechnology traits and the discovery and development of active ingredients globally, which are critical inputs in the development of genetically modified seeds and agrochemicals.

In terms of the agreement, a trustee – an independent third party – will be appointed to oversee the divestiture, which will include distribution rights and other intellectual property rights owned or licensed to Bayer in South Africa.

This is to ensure the development, production and sale of cotton in South Africa.

The merger is part of the global transaction between Bayer and Monsanto, which has been notified in various jurisdictions, including the US, Russia, China and Brazil.