BASF to sell Clearfield canola system as a condition for acquiring LibertyLink

The ripple effect from Bayer’s acquisition of Monsanto continues in the canola seed business.

Canada’s Competition Bureau says it has approved BASF’s purchase of Bayer’s LibertyLink canola system on the condition that BASF sell its own Clearfield production system for canola.

“The Commissioner of Competition concluded that BASF’s acquisition of the Bayer assets would likely have substantially lessened or prevented competition in the supply of canola seeds and traits in Canada due to BASF’s pre-existing position in that market,” says a statement from the Competition Bureau, released on Wednesday.

To address these concerns, the Bureau says BASF has agreed to sell its Clearfield system for canola — including the herbicide tolerance trait in North America, compatible imidazolinone herbicides in Canada and other supporting assets — to “a buyer acceptable to the Commissioner.”

More specifically, the company says it has agreed to to divest its existing business in North America relating to the breeding, marketing and sale of canola seeds under the Clearfield brand, as well as the marketing and sale in Canada of imazamox/imazapyr herbicides under the Ares brand and the imazamox herbicides under the Tensile brand. BASF says it will continue to develop and support Clearfield in other products and geographies.

Neither the Bureau nor BASF have named a potential purchaser.

Bayer is selling its LibertyLink canola business to BASF as a condition required by regulators in approving its acquisition of Monsanto, which owns the Roundup Ready trait in canola.

Approximately 55 percent of canola seed sold in Canada contains Bayer’s LibertyLink trait, while Monsanto’s Roundup Ready trait holds approximately 40 percent market share. BASF’s non-genetically modified Clearfield trait accounts for around 5 percent.

The Bureau says it was concerned about reduced rivalry between the LibertyLink and Clearfield systems, and that having one company own both traits would have “blunted the incentives of seed companies to continue to invest in breeding canola varieties containing the Clearfield trait, resulting in a loss of choice for growers.”

“The canola industry contributes over $26 billion per year to the Canadian economy, making it one of our most essential agricultural assets. Today’s agreement with BASF is necessary to protect competition and innovation in this important industry following Bayer’s recent acquisition of Monsanto,” says Matthew Boswell, Interim Commissioner of Competition at the Competition Bureau.

Bayer completed its US$63 billion acquisition of Monsanto earlier this month, but the integration of the two companies is pending completion of the divestitures to BASF, which Bayer expected to complete by early August.

A snapshot of the Canada’s canola seed market

Nearly all canola seed sold in Canada contains one of three herbicide tolerance traits:

LibertyLink

  • Bayer has agreed to sell to BASF
  • Approximately 55 percent market share
  • Confers tolerance to the active ingredient glufosinate ammonium (Liberty)
  • Contained in all canola varieties sold by Bayer

Roundup Ready

  • Acquired by Bayer in its purchase of Monsanto
  • Approximately 40 percent market share
  • Confers tolerance to the active ingredient glyphosate
  • Monsanto uses this trait in all its own canola varieties, but also broadly licenses to competitors including Corteva Agriscience, Brett Young, Canterra and Nutrien;

Clearfield

  • BASF has agreed to sell as a condition for acquiring LibertyLink
  • Approximately 5 percent market share
  • Confers tolerance to a family of chemicals known as imidazolinones.
  • Contained in canola varieties of a number of seed companies, including Brett Young, Canterra, Corteva Agriscience, and Nutrien

(Some info sourced from Competition Bureau statement)

 

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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