Germany's Bayer plans to sell its digital farming business to BASF as part of changes to concessions it has offered to win over antitrust regulators for its proposed takeover of Monsanto.
Bayer, which had previously only agreed to grant a licence to competitors, said on Wednesday that as part of the changes agreed with the European Commission it would retain a licence to certain digital farming applications.
Digital farming, which combines sensors, software and precision machines, is still in its infancy but all the large players in the seeds and pesticides industry are developing digital offerings.
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The changes stem from an agreement in principle with the U.S. Justice Department (DoJ) over an antitrust approval, with only a few remaining details to be hammered out, a source familiar with the matter told Reuters.
The Wall Street Journal reported late on Monday that an outline deal with the DoJ had been reached.
Bayer, which has already secured conditional European approval, declined to comment on Wednesday which regulator had prompted it to make the changes.
It added that BASF was the intended purchaser of all the assets it was selling.
In a separate statement, the European Commission said it had approved Bayer' modifications to the commitments it made to get approval for the Monsanto purchase.
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The competition watchdog said it was still assessing whether BASF was a suitable buyer for the units under an April 30 deadline.
The head of Bayer's Crop Science unit, Liam Condon, told Reuters in September that Bayer's approach in digital farming had been to control plant pests while Monsanto's focus in digital farming was on improving yields.
The changes to the antitrust remedies were made "in response to corresponding indications from regulators", Bayer said in a statement on Wednesday.
In addition, certain Bayer seed treatment products will be offered for sale instead of Monsanto's NemaStrike seed treatment brand.
The changes do not affect Monsanto's digital farming offering, which Bayer will keep after the deal.
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Bayer reiterated on Wednesday that it would seek to wrap up the deal in the second quarter.
The German company has already pledged to sell certain seed and herbicide assets for 5.9 billion euros ($7.2 billion) to BASF, as well as its vegetable seeds business.
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