U.S. Justice Department approves $62.5 bn Bayer-Monsanto purchase pact

The U.S. Department of Justice has reportedly given the green signal for Bayer AG’s acquisition of Monsanto in a purchase deal worth USD 62.5 billion. Sources state that this approval by the Justice Department has come after both the companies reached an agreement to sell some of their additional assets.

As per the terms and conditions of the deal with the U.S. judicial authorities, Bayer has approved the sale of its seed & treatment assets to BASF, while making concessions pertaining to its digital agriculture portfolio. Post its strategic decision, the Bayer’s share price increased by 4.7%. On the other hand, the stock price of Monsanto, an American agricultural biotechnology company, touched a four-year-high margin closing at USD 125.15, at an increase of 6.2%.

According to the key officials of Bayer AG, the acquisition of Monsanto will be finalized in the second quarter of this year. Last week, Monsanto had declared in its quarterly income report that the firm was pretty confident about the positive approval of the purchase deal by the U.S. and other regulatory bodies during this second quarter.

Earlier in March, the Justice Department had stated that while still assessing the deal, it was observed that the use of genetically altered seeds has been banned in Europe. However, these seed types apparently find extensive applications across the U.S. Exercising their opinion on the same, experts point out that this may be a prime factor contributing toward the approval of this multi-billion-dollar deal.

Incidentally, in March this year, the EU antitrust authorities had already given a green signal to the deal after both Bayer and Monsanto had agreed to sell its band of assets to BASF SE. It has been reported that the countries such as Australia, China, and Brazil have also granted a nod of approval for the proposed merger agreement. Post this approval, the Bayer-Monsanto pact now succeeds the Dow-Dupont merger deal and a joint venture agreement between Syngenta and ChemChina last year.