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Bayer sets Monsanto acquisition closing date for Q2

Bayer AG said it expects to close its $62.5 billion deal to acquire Monsanto Co. in the second quarter of 2018, later than originally anticipated.

The German drug and crop chemicals maker had expected to close the deal at the beginning of 2018 but has yet to secure EU approval for the acquisition.

To allay EU's anti-competition concerns, Bayer has agreed to sell its whole vegetable seeds business.

"We'd prefer not to sell it because it's a wonderful business. This is something our colleagues worked very hard at, but we have to make some concessions," Bayer CEO Werner Baumann said during the company's fourth-quarter 2017 earnings call.

The company said it had achieved key regulatory approvals for the merger, including a green light from Brazilian authorities.

"This is an important milestone on the road to closing this transaction. Brazil is one of the world's most important agricultural markets," Baumann said.

Over half of about 30 regulatory authorities worldwide have approved the transaction. EU antitrust regulators are also set to approve the deal with conditions, according to Reuters, who cited people familiar with the matter. This is after the regulators consecutively extended the review period for the transaction.

Bayer's vegetable seeds business, which makes up about 10% of its crop science division, generates about $430 million in sales annually and employs about 2,000 employees. It is based in the Netherlands.

Meanwhile, Bayer's CEO said its collaboration with Loxo Oncology Inc. to develop a cancer drug, larotrectinib, is proof that the company's Monsanto acquisition does not come at the cost of its other businesses.

Larotrectinib recently caused tumors to shrink across three clinical trials in patients with 17 unique tumor types. The companies plan to file market authorization application in the U.S. for larotrectinib in the coming weeks.