STRASBOURG, France, LEVERKUSEN, Germany - Bayer AG, Leverkusen, Germany, has moved into a prime position to become the purchaser of Aventis CropScience, the crop protection and crop production company owned by Aventis AG, Strasbourg, France, and Schering AG, Berlin, Germany. Confirming rumors that Bayer was the frontrunner for the purchase of Aventis CropScience, the three companies announced July 10 that the negotiation process for the divestment of the crop protection unit will be continued exclusively with Bayer.
In November 2000, Aventis announced its intention to divest Aventis CropScience, which is 76 percent owned by Aventis and 24 percent owned by Schering, by the end of 2001 in order to focus on its pharmaceutical business. After reviewing different divestment options, Aventis has now decided on a trade sale, which it considers the most value-enhancing option, according to a statement issued by the company. After analyzing first bids from several companies, Bayer has emerged as the "most-promising partner - financially and socially," said Aventis.
With the acquisition, which would be the largest in the company’s history, Bayer said it plans to significantly expand its crop protection business. Manfred Schneider, Bayer’s chairman of the board of management, said, "By merging the two businesses, we would create one of the world’s leading companies in this industry - headquartered in Europe with global reach."
While the three companies did not give details on the price of a sale, analysts said the deal could value CropScience at $6.8 billion. If the acquisition goes through, Bayer would be closer to Syngenta, the current market leader in annual sales.
As the deal progresses, industry watchers believe Bayer may sell its insecticide business to BASF to pre-empt anti-trust issues.
Aventis noted that the decision to continue the negotiations exclusively with Bayer AG does not constitute any legally binding agreement between the involved companies. As the negotiations evolve, all legally required information, including regulatory approvals, and consultation procedures will be adhered to.
A final deal will likely not be completed until early 2002.