Bayer AG could be nearing a €1.5 billion deal to sell its vegetable seeds business to BASF SE, Reuters reported, citing "two people familiar with the matter."
The German drug and crop chemicals maker is in advanced discussions with Rhein, Germany-based chemicals company BASF, which is said to be conducting due diligence to acquire the unit.
The Netherlands-based vegetable seeds business makes up about 10% of Bayer's crop science division. The unit generates annual sales of about $430 million. Bayer is pursuing the sale of the business to allay the EU's anti-competition fears regarding its proposed $62.5 billion deal to acquire agriculture company Monsanto Co.
"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.
EU regulators are set to conditionally approve the Monsanto transaction on April 5 after consecutive extensions of the review period. Bayer expects to close the acquisition in the second quarter of 2018, later than originally anticipated.
In October 2017, Bayer also agreed to sell certain crop science businesses to BASF for €5.9 billion.
