Quick Take: China Gives Partial Green Light to Bayer-Monsanto Deal

German chemicals giant Bayer AG has obtained conditional approval from China's Commerce Ministry to acquire Monsanto Co., clearing one of its major international regulatory hurdles for the $66 billion deal to materialize.

The antitrust review, which began in December 2016, concluded that Bayer must spin off some businesses globally, including those of vegetable seeds, soybean, potatoes and cotton, among other assets, the ministry said in a statement on its website Tuesday.

The ministry also ordered Bayer to share data and its agricultural digital platform with domestic mobile-application developers.

China’s potential veto power of a merger deal involving two companies based outside its borders reflects Beijing’s growing voice in the development of such deals. Other major markets, including the U.S., Europe and Japan, have exercised similar power to veto or alter such deals when either of the two companies involved has a major presence in their respective markets.

In early 2016, Bayer offered to acquire Monsanto, the world’s largest seed company, which initially rejected the proposal but later accepted one with a higher price.

The merger is still awaiting approval from antitrust agencies of other markets.

Bayer has announced it will sell its seed and herbicide businesses to competitor BASF SE for $7 billion to meet the regulatory review of the European Commission, which is expected to rule on the deal in April.

The U.S. Justice Department’s antitrust review of the merger is ongoing. And in Russia, the chemicals-maker has sued the country’s regulator for its demands to share technology with the local agricultural sector.

Contact reporter Mo Yelin (yelinmo@caixin.com)