Bayer, BASF Reach Agreement Over Fipronil

Bayer fulfills a major condition imposed by the European Commission and the U.S. FTC as part of the Aventis CropScience acquisition.

MONHEIM, Germany — Bayer CropScience AG today announced that it intends to sell a package of selected insecticides and fungicides, including fipronil, to BASF AG while retaining certain back-licenses for non-agricultural applications. The total package is valued at roughly $1.3 billion. Taking into consideration the back-licenses the cash purchase price amounts to $1.3 billion. However, any licensing of the product from BASF back to Bayer still has to be finalized and could vary by market and by country.

With the completion of the proposed transaction, Bayer CropScience would fulfill within the given timeframe a major condition imposed by the European Commission and the U.S. Federal Trade Commission (FTC) as part of the Aventis CropScience acquisition. This transaction is subject to the approval by the European Commission and the U.S. Federal Trade Commission.

Following the respective consent orders the agreements with BASF contain assets and rights related to two insecticides (active ingredients: fipronil, ethiprole) and a number of fungicides (active ingredients: prochloraz, iprodione, triticonazole, fluquinconazole and pyrimethanil) for certain regions and application fields. BASF will also acquire the Aventis CropScience manufacturing plant in Elbeuf, France. The total revenue from the products and operations involved in the transaction amounted to about $500 million in 2001.

“This acquisition allows us to considerably strengthen our insecticide business, especially in growing and attractive specialty markets. The seed treatment business is also a very good fit with our new fungicides which have considerable potential in this market,” said Peter Oakley, member of BASF’s board of executive directors and responsible for the Agricultural Products & Nutrition segment.

After the sale of these products, Bayer CropScience will now focus entirely on developing its business and expanding its market position, said Werner Wenning, chairman of the board of management, Bayer AG.

"Cash-in from the sale also contributes to improving the Group´s financials, as does the cash inflow from the other divestments we have already announced," Wenning said.

Dr. Jochen Wulff, chairman of the board of management, Bayer CropScience AG, said Bayer reached an agreement with BASF following a "very competitive auction process and intensive negotiations with several interested parties."

"The purchase price agreed represents a fair compensation for the required divestments. I am also pleased that we were able to retain licence rights to market Fipronil and its mixtures in certain non-agricultural markets within the scope of the FTC consent order," Wulff said. "The integration of the Aventis CropScience operations is moving ahead quite rapidly and we continue to focus our efforts on the further integration and strategic development of the new Bayer CropScience."