FRANKFURT (Reuters) - Bayer (BAYGn.DE) has agreed to sell its Liberty herbicide and LibertyLink-branded seeds businesses to win antitrust approval for its acquisition of Monsanto (MON.N), it said on Monday.
The divestment of the two global brands, a requirement imposed by South Africa's Competition Commission on Sunday, will account for the bulk of asset sales worth about $2.5 billion which need to be made to satisfy competition regulators looking at the $66 million Monsanto deal, sources close to the matter have said.
"Bayer has agreed to these conditions and is evaluating how best to execute the imposed divestiture," the German group said in its statement.
It would not comment on revenues, number of affected staff or the value of the assets.
While South Africa is a relatively small market for the two global agricultural supplies giants, the move marks the first time for Bayer to acknowledge it has to sell the two related Liberty brands, which compete with Monsanto's Roundup weed killer and Roundup Ready seeds.
The planned divestitures are also widely expected to be required by competition regulators in larger jurisdictions, such as the United States, where approval has been requested, and the European Union, where an application for approval has yet to be made.
"Bayer will continue working with regulators globally with a view to receiving approval of the proposed transaction by the end of 2017," the company said, reaffirming an earlier goal.
LibertyLink seeds, mainly used by soy, cotton and canola growers, are an important alternative to Roundup Ready seeds for farmers suffering from weeds that have developed resistance to the Roundup herbicide, also known as glyphosate.
The spread of Roundup-resistant weeds in North America has been a major driver behind Liberty sales.
Monsanto, for its part, has responded by combining Roundup with older weed killer dicamba to finish off the Roundup-resistant weeds, while selling farm crops that withstand the plant-killing effects of both compounds.
As part of a global investment drive worth hundreds of millions of euros to double the global output capacity of Liberty since 2013, Bayer has built a production plant in Mobile, Alabama, to complement an existing facility in Frankfurt, Germany.
Reporting by Ludwig Burger; Editing by Greg Mahlich