May 29 (UPI) -- The U.S. Justice Department said Tuesday it will require German drug maker Bayer to divest about $9 billion to proceed with its $66 billion acquisition of Monsanto.
Bayer agreed to divest approximately $9 billion in assets to a chemical company called BASF before it acquires agrochemical company Monsanto, the U.S. Justice Department said in a release. Assistant Attorney General Makan Delrahim called it the "the largest merger divestiture ever required by the United States."
The agreement came about as part of a settlement that the Justice Department reached with Bayer over concerns about the merger squashing competition.
Bayer, known as a brand name for aspirin, has a crop science division and is one of the two largest agricultural companies in the world. The Missouri-based Monsanto is the other, the Justice Department release said.
Under the settlement, Bayer must sell its agricultural business assets that compete with Monsanto to BASF. That includes Bayer's cotton, canola, and soybean and herbicide businesses.
"This comprehensive structural solution to significant horizontal and vertical competition concerns-the largest merger divestiture ever required by the United States-preserves competition in the sale of these critical agricultural products and protects American farmers and consumers," Delrahim said in a statement. "We commend the parties for working with the Antitrust Division to resolve our concerns on behalf of American consumers."
The settlement came on the the same day the Justice Department's Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the merger. The judge's approval of the settlement would resolve the suit.
The Bayer-Monsanto deal is still pending approval from the Canadian and Mexican governments, CNBC reported. It has until June 14 to seal the deal or Monsanto can withdraw and make a higher bid.
The merger of Germany-based Bayer and Monsanto to create an integrated pesticide and seed company would be the largest acquisition of a U.S. company by a German firm, beating out Daimler AG's $40 billion purchase of Chrysler in 1998.