US FTC okays Bayer bid to buy Aventis CropScience

Subject: US FTC okays Bayer bid to buy Aventis CropScience
Date:    Fri, 31 May 2002 09:25:21 -0400
From:      Stephen Tvedten <steve@getipm.com>
Organization:     Get Set Inc. (www.getipm.com)

To: Paul Helliker <phelliker@cdpr.ca.gov>
Director, State of California, Department of Pesticide Regulation

WASHINGTON, May 30 (Reuters) - The U.S. Federal Trade Commission on Thursday approved Bayer AG's (BAYG) bid to buy Aventis SA's (AVEP) CropScience unit after the companies agreed to divest four agricultural chemical products.

The FTC said it had agreed not to oppose the $6.2 billion deal as long as Bayer and Aventis sell Aventis' cool-weather cotton defoliant, called Folex, as well as three other products, a chemical insecticide, insecticide ingredients and grass herbicide.

"These new generation product markets are on the forefront of pesticides, insecticides, and herbicides that will be significant in the future due to their improved effectiveness and reduced environmental impacts," said Joseph Simons, director of the FTC's competition bureau.

The acquisition will boost Bayer's crop-protection business to the No. 2 spot in the $30-billion-a-year worldwide agrochemicals market, behind Switzerland's Syngenta AG (SYNZn). Bayer now ranks seventh.

Officials from Bayer and Aventis were not available for comment on the FTC decision.

European regulators approved the deal in April after the company agreed to divest product lines valued at about 600 million euros ($562 million).

The FTC said that without the U.S. divestments, the merger would have hurt competition in the four product areas.

The biggest market at issue was for defoliants used in the harvest of cotton. A Bayer product called DEF and Aventis CropScience's Folex are the only two competitors, the agency said.

The Folex business will be sold to a company called Amvac Corp., the agency said.

The other products to be divested under the agreement are insecticide ingredients fipronil and acetamiprid, as well as flucarbazone, an ingredient in a Bayer herbicide called Everest.

It said new insecticide ingredients are becoming more important because the U.S. Environmental Protection Agency is pulling older insecticides from the market over health and environmental concerns.

Aventis and Schering AG (SCHG) of Germany -- which has 24 percent of CropScience -- decided to sell the company in order to refocus on higher-margin pharmaceuticals.

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