The European Commission has approved the $66bn (€54bn) takeover of US seed and herbicide giant Monsanto by Bayer, after the German company promised to sell off a substantial part of its business to ease competition regulator concerns.

As part of the agreement, Bayer has said it will sell part of its herbicide and seeds business to rival company BASF, including its canola, cotton, and soya bean seeds business, an R&D platform for hybrid wheat varieties, its global vegetable seed business as well as certain glyphosate-based herbicides in Europe.

World's largest

The combination of Bayer and Monsanto will create the world’s largest seed and chemical company that will command almost 25% share of the market in both sectors.

Margrethe Vestager, the European competition commissioner, said the decision to force Bayer to sell some of its assets will ensure competition remains in the marketplace.

“We have approved Bayer's plans to take over Monsanto because the parties' remedies, worth well over €6bn, meet our competition concerns in full. Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger,” said Vestager.

“In particular, we have made sure that the number of global players actively competing in these markets stays the same. That is important because we need competition to ensure farmers have a choice of different seed varieties and pesticides at affordable prices,” she added.

The European Commission’s approval of the Bayer-Monsanto tie-up is the last instalment in a trio of mega-deals that have taken place in the seed and agrichemical sector over the last two years. In December 2015, Dow and DuPont announced a $130bn merger, while just a month later the Chinese state-owned conglomerate ChemChina revealed a $43bn takeover of the Swiss seed and chemical giant Syngenta.

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