Bayer planning to sell digital farming business to BASF

A map interface in Bayer Digital Farming's Zone Spray system (source: Bayer Digital Farming)

Bayer has confirmed it will be selling its digital farming business to gain approval of its acquisition of Monsanto instead of licensing the digital assets out to a competing company.

In gaining regulatory approval of the deal in Europe, Bayer had agreed to license its digital farming package to BASF.

However, in a statement shared with RealAgriculture on Wednesday, the company confirms it now intends to sell the digital business, rather than license it. The intended purchaser is BASF.

“These changes have been made in response to corresponding indications from regulators. Please appreciate that we are unable to provide any further details,” says the statement from Bayer.

The plan would see Bayer, in turn, license some of the software from BASF.

With Monsanto being the parent company of The Climate Corporation — a major player in the digital agriculture market, it’s possible the sale of Bayer Digital Farming is one of the requirements laid out by the U.S. Department of Justice. The Justice Department has not made any official statement, but the Wall Street Journal reported earlier this week that the U.S. regulator is poised to approve the Bayer-Monsanto deal, with conditions.

Bayer says it will also be selling certain Bayer seed treatment products instead of Monsanto’s NemaStrike — a change from what was previously announced.

These latest side deals come after BASF reached a agreement last fall to acquire part of Bayer’s seed and crop protection business. In the earlier move to gain approval from regulators, Bayer agreed to sell its global glufosinate-ammonium business and the related LibertyLink herbicide tolerance technology, as well as its North American and European canola and soybean seed businesses, to BASF for approximately C$8.7 billion.

Financial terms related to these additional divestitures have not been made public.

Bayer Digital Farming recently unveiled a fungicide mapping program for canola growers — likely the first encounter for many farmers with Bayer’s digital agriculture business in Canada.

Bayer’s statement on Wednesday:

In connection with the proposed acquisition of Monsanto, we confirm that – other than was previously communicated – certain Bayer seed treatment products will be offered for sale instead of Monsanto’s NemaStrike. In addition, Bayer’s digital farming business is to be sold rather than outlicensed, and Bayer in return will receive a license back to certain digital farming applications. BASF is the intended purchaser of all these assets. These changes have been made in response to corresponding indications from regulators. Please appreciate that we are unable to provide any further details.

The proposed acquisition of Monsanto remains subject to customary closing conditions, including receipt of required regulatory approvals. Bayer and Monsanto are working closely with the authorities with the goal of closing the transaction in the second quarter of 2018.

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Kelvin Heppner

Kelvin Heppner is a field editor and radio host for RealAgriculture and RealAg Radio. He's been reporting on agriculture on the prairies and across Canada since 2008(ish). He farms with his family near Altona, Manitoba, and is on Twitter at @realag_kelvin. @realag_kelvin

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