EU clears Bayer, Aventis deal

BRUSSELS, April 17 (Reuters) - The European Commission said on Wednesday it had approved Bayer's 7.25 billion euro ($6.38 billion) purchase of Aventis CropScience (ACS), on the condition that Bayer divests a number of businesses.

The European Union's competition watchdog, which conducted an in-depth four-month investigation, had said the deal as originally structured would be anti-competitive, but said on Wednesday Bayer had agreed to the conditions.

"The commitments fully resolve the Commission's competition concerns,'' it said in a statement.

"Bayer has offered a comprehensive set of commitments, including the sale, in one single package, of best-selling insecticide Fipronil and a number of fungicides, which together constitute ACS's entire European seed treatment business.''

The Commission had said the deal would reduce competition in insecticides, herbicides, fungicides and seed treatment products for the agricultural market, as well as in the control of parasites, such as ticks and fleas in domestic animals.

Such concerns had been assuaged by Bayer's commitments, which also included an agreement to give a number of exclusive licences for various products in one or more of the EU's 15 member states, and to discontinue several third-party distribution agreements.

But even with the divestitures, the acquisition of CropScience, which had sales of four billion euros in 2000, will increase Bayer's product offerings in many herbicides and in biotechnology.

CropScience is now held by Berlin-based Schering and Franco-German drugs group Aventis. Schering holds a 24 percent stake in the firm, whose 7.25 billion euro price tag includes 1.9 billion euros in debt.

The deal was announced in October. Last week Klaus Pohle, Schering AG's chief financial officer, told his company's annual shareholders meeting that the German drugs group expected the sale of CropScience to be completed in May.

Company officials expect the deal to win approval soon from the U.S. Federal Trade Commission.