Competition on the horizon for BASF! A new player showed interest in buying the breeding activities of Bayer, known under the name Nunhems. KWS Saat, a German breeder of agricultural crops, issued a non-binding offer to Bayer for the business.
Currently Nunhems is still part of German chemical company Bayer. Due to the proposed acquisition of Monsanto and the overlap between the activities of Monsanto's vegetable breeding business De Ruiter Vegetable Seeds with the breeding business of Nunhems, the European Commission required Bayer to sell their breeding activities to get approval for the merger. Since the end of April, they have been in exclusive talks with BASF on the acquisition of the entire vegetable seeds business, including the horticultural breeding activities of Nunhems.
Fighting
Clearly the German company KWS Saat SE would like to see things differently. They revealed yesterday that they made a non-binding bid in January to acquire the Bayer seed business. Following publication on May 25 of the final commitments given by Bayer to the European Commission, KWS SAAT SE announced it had renewed this bid.
KWS operates as an independent seed specialist in many markets. KWS’ particular focus is on agricultural crops. "We're offering Bayer and its shareholders terms and conditions for the sale of the vegetable seed business", the company states, followed by a sneer to their BASF competitors. "If Nunhems were acquired by KWS, the agricultural sector, farmers and consumers alike would benefit from the sale to an independent seed company without an agrochemicals division."
Chemical breeding
Last year BASF already acquired selected Crop Science businesses from Bayer, including the North American and European canola seed businesses and the soybean seed business.
The breeding industry has been under the attention of the chemical industry for years now. Chinese state-owned chemical company ChemChina took over Swiss seed and plant protection giant Syngenta in 2016. In that same year, the world's two largest chemical companies Dow Chemical and DuPont announced their merger plans. The DowDupont Agri daughter Corteva Agriscience is active in breeding, though it focuses on agricultural crops as wheat and soy for now.
The KWS release shows the frustration of the company and their last-minute activities in trying to cut in on the deal, being a more favourable candidate.
"As a Dutch vegetable seed company with a long tradition, Nunhems has been a respected international leader for many years", KWS writes in the news release. "With its products, expertise and strong customer centricity, Nunhems is a strategically sensible complement to KWS’ existing portfolio and would dovetail seamlessly into KWS’ corporate culture and its long-term orientation."
The Bayer-Monsanto acquisition trip continues. On Tuesday, Bayer obtained conditional approval from the Antitrust Division of the United States Department of Justice (DOJ) for the proposed acquisition of Monsanto. "According to the DOJ’s conditional approval, the integration of Monsanto into Bayer can take place as soon as the divestments to BASF have been accomplished. This is expected to be in approximately two months", Bayer stated. Now the wait is still for the go-ahead from Canada and Mexico.
According to Reuters, the company is pressed for time. If Bayer does not close the deal by June 14, Monsanto could withdraw from the takeover agreement and seek a higher price.
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