Company
Bayer wins dispute with BASF over seed trade
Bayer has been successful in a dispute with BASF over the sale of its seed business. As Leverkusen’s team announced on Friday, the arbitral tribunal has dismissed the lawsuit. A BASF spokesperson in Ludwigshafen confirmed this, saying: “We are disappointed that the arbitral tribunal has not followed our arguments.” This is a relief for Bayer, because in the worst case a burden of billions of euros would have depressed profits.
Bayer has been successful in a dispute with BASF over the sale of its seed business. As Leverkusen’s team announced on Friday, the arbitral tribunal has dismissed the lawsuit. A BASF spokesperson in Ludwigshafen confirmed this, saying: “We are disappointed that the arbitral tribunal has not followed our arguments.” This is a relief for Bayer, because in the worst case a burden of billions of euros would have depressed profits.
In 2017 and 2018, the pharmaceutical and chemical group sold large parts of its seed and herbicide business to its domestic rival BASF for EUR 7.4 billion. This should allay competition watchdogs’ concerns about too much market power from the $60 billion acquisition of US seed giant Monsanto.
In 2019, BASF filed an arbitration claim, seeking damages from Bayer, arguing that certain cost items, notably personnel costs, had not been adequately disclosed and appropriately allocated to some of the companies sold. Bayer had denied that.
According to reports, BASF demanded 1.7 billion euros plus interest. JPMorgan analyst Richard Vosser believes Bayer has acknowledged contingent liabilities of €1.5 billion. That would be about three percent of the market value. Exactly that is not reflected in the balance sheet of the group. The item is expected to be included in the other contingent liabilities reported in the 2021 annual report for a total amount of approximately three billion euros.
Communication Bayer