Bayer AG one step closer to Aventis buyout

Golf Course News, Jun 2002 by Overbeck, Andrew

BERLIN - After getting the goahead from European Union (E.U.) antitrust officials for its purchase of Aventis CropScience in mid-April, Bayer AG is now waiting for approval from the U.S. Federal Trade Commission (FTC) for final clearance on the buyout. According to Bayer spokesman Guenter Forneck, a decision by the FTC was expected sometime in May. At press time, further information was not available.

As part of its approval of the proposed 7.3 billion euro ($6.4 billion) purchase of Aventis CropScience, the E.U. is forcing Bayer to divest several insecticides. According to Bayer, the divestiture of fipronil, ethoprole and acetamaprid (a new neonicitinoid) will lead to 600 million euros ($522 million) in lost sales.

"It was to be expected that insecticides [would be divested] as Bayer already has a strong position in this segment," said Forneck. "Bayer maintains two neonicitinoids -- imidacloprid and thiacloprid." He added that Bayer's primary motivation in purchasing Aventis CropScience, especially in the U.S. market, was gaining access to its strong herbicide product line and biotechnology research.

Once the deal goes through, Bayer will be the second ranked agrochemical manufacturer behind Syngenta AG. However, the company's first quarter operating profit dropped 46 percent to 493 million euros ($442 million), and Bayer officials warned that 2002 was going to be a tough year.