The companies announced the deal to create one of the world’s largest agriculture trading firms a year ago to better compete with market leaders Archer-Daniels-Midland and Cargill.

Bunge and Viterra earlier this month offered to sell Viterra’s crush and refining plants for oilseeds in Hungary and Poland to allay EU competition concerns.

They will now tweak these offered remedies in return for the European Commission’s approval and following feedback from market participants, the person said.

The Commission, which is scheduled to decide on the deal by Aug. 1, and Bunge declined to comment.

The deal, which has been given a green light in Brazil, faces regulatory headwinds and farm groups’ concerns in Canada.

Bloomberg was the first to report about the imminent EU approval.

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The companies, which announced the deal a year ago to better compete with global giants Archer-Daniels-Midland and Cargill, submitted concessions to the EU competition enforcer last week.

They offered to divest assets in two EU countries, other sources told Reuters last week.

Viterra has 13 oilseed crushing plants among its more than 30 processing and refining facilities in 11 countries, according to its website.

The European Commission, which is scheduled to decide on the deal by Aug. 1, has sought feedback from farmers’ groups, clients and rivals before deciding whether to accept Bunge’s offer.

“We are confident that the commitments we have offered address the areas of concern expressed by the Commission, which are limited to specific markets,” Bunge said.

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The companies announced their merger a year ago to rival global giants Archer-Daniels-Midland and Cargill.

The Commission, which acts as the EU competition enforcer, can either clear the deal with or without remedies after its preliminary review or it can open a four-month investigation if it has serious concerns.

Bunge Chief Executive Greg Heckman has said the company may be able to avoid having to sell assets to win regulatory approval thanks to healthy competition in commodities market in Canada, the United States, Brazil, Argentina, China and parts of Europe.

The Canadian competition watchdog, however, has cited major concerns while farm groups voiced similar worries.

The deal also needs the regulatory green light in North America, South America and China.

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The tie-up is set to create a company with control of more than a quarter of the world’s seed and pesticides market.

Driven by shifting weather patterns, competition in grain exports and a faltering global farm economy, Dow/Dupont and ChemChina/Syngenta had earlier led a wave of consolidation in the sector.

Both deals secured EU approval only after the companies offered substantial asset sales to boost rivals.

Environmental and farming groups have opposed all three deals, worried about their power and their advantage in digital farming data, which can tell farmers how and when to till, sow, spray, fertilize and pick crops based on algorithms.

The European Commission said Bayer addressed its concerns with its offer to sell a swath of assets to boost rival BASF, confirming a Reuters story on Feb. 28.

“Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger,” European Competition Commissioner Margrethe Vestager said in a statement.

“In particular, we have made sure that the number of global players actively competing in these markets stays the same.”

Vestager said the Commission, which received more than a million petitions concerning the deal, had been thorough by examining more than 2,000 different product markets and 2.7 million internal documents to produce a 1,285-page ruling.

Bayer has already reached a deal to sell certain seed and herbicide assets for 5.9 billion euros (C$9.4 billion) to BASF and to give it a licence to its global digital farming data. It will also divest its vegetable seeds business to BASF.

The Commission is due to rule on the BASF deal by April 16.

Online campaigns group Avaaz criticized the EU approval.

“This is a marriage made in hell. The Commission ignored a million people who called on them to block this deal, and caved in to lobbying to create a mega-corporation which will dominate our food supply,” Avaaz legal director Nick Flynn said.

U.S.-incorporated Avaaz, funded by its members, is active in climate change, poverty, conflict and corruption issues.

The Greens grouping in the European Parliament echoed the sentiment, saying smaller players in the agriculture industry needed to be helped too.

“The agriculture industry is already far too concentrated, giving a handful of massive firms a stranglehold on food production. Merging two of the biggest players only makes a bad situation worse,” Greens spokesman Bart Staes said.

China has given conditional approval to the Bayer/Monsanto deal, which has also won a green light in Brazil. It is currently being reviewed by U.S., Canadian and Russian antitrust authorities.

— Foo Yun Chee is Reuters’ senior competition correspondent, based in Brussels.

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The proposed remedies “are very significant and we are confident they fully address the European Commission’s concerns,” the German company said in a statement on Monday.

The European Commission extended the deadline for its decision on the deal to April 5 from March 12.

Bayer said it was still aiming to wrap up the deal “in early 2018.” Both the EU competition enforcer and Bayer declined to say what assets Bayer had offered to put on the block.

The offer includes assets to be sold to BASF as well as divestments of vegetable seeds business in some EU countries, a person familiar with the matter said.

“This is a very diverse package. It is not just about divesting assets,” the person said, declining to provide details.

Depending on the feedback from third parties, it is possible the package could be adjusted, the source said. The Commission is expected to seek comment from industry rivals and customers in the coming days.

Bayer struck a deal with BASF in October last year to sell seed and herbicide businesses for 5.9 billion euros (C$9.03 billion) but has said it is prepared to do more to gain EU approval.

The Monsanto deal has triggered opposition from some farmers and environmentalists who have sent more than 50,000 petition emails and more than 5,000 letters to the Commission.

— Reporting for Reuters by Foo Yun Chee and Ludwig Burger.

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The ongoing proceedings would have given the German drugs and pesticides maker until midnight on Monday to offer further concessions to EU regulators — or request another extension of up to 10 working days.

The EU did not state a reason for the extension to March 12 to deliver its verdict on the merger, which effectively gives Bayer a new deadline at midnight Feb. 5 to propose concessions such as asset sales.

A Bayer spokesman declined to comment, beyond confirming the EU’s statement.

The transaction, opposed by environmentalist groups and by some farmers’ associations, would make Bayer the largest supplier of seeds and crop chemicals, surpassing ChemChina’s Syngenta, DowDuPont and BASF.

Late last year, the EU Commission granted Bayer more time to provide information, which pushed the deadline for the EU to decide over the deal back to March 5 from Jan. 22. Bayer had initially hoped to wrap up the deal by end-2017.

Bayer CEO Werner Baumann has described antitrust procedures as going to “unimaginable depths,” with more than four million pages of documents provided to EU investigators, but the delays have also allowed the target company to cut its debt, lessening the financial burden for Bayer.

The Monsanto deal’s value last year was cut to US$63.5 billion including debt, down from an initial US$66 billion, because the U.S. seeds giant had lowered its financial liabilities.

Bayer has already agreed to sell certain seed and herbicide businesses for 5.9 billion euro (C$9 billion) to domestic rival BASF but has said it was bracing for antitrust authorities to demand more asset sales.

— Reporting for Reuters by Ludwig Burger and Foo Yun Chee.

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The US$66 billion deal would make Bayer the world’s largest pesticides and seeds company, an outcome already facing strong criticism from environmentalists and some farm groups.

The European Commission is expected to send a charge sheet known as a statement of objections to the companies in the coming weeks, but a final decision has not yet been made, the person said.

The EU competition enforcer declined to comment. Companies have to address all the concerns addressed in the document with concessions or face a veto.

“Bayer continues to work with the necessary regulatory parties, including the EU, toward a successful close of the acquisition of Monsanto in early 2018,” Bayer spokesman Darren Wallis said in an email. He declined further comment.

Monsanto spokeswoman Sara Miller said the company had no comment.

Bayer and Monsanto met with Commission officials earlier this week and were told of the regulatory concerns.

Bayer agreed in October to sell its seed and herbicide units, including its LibertyLink-branded seeds and Liberty herbicide businesses, to world No. 3 crop chemicals maker BASF for 5.9 billion euros as part of an attempt to ease competition concerns.

It has yet to make a formal offer of concessions to the Commission which opened a full-scale investigation into the deal in August after expressing preliminary concerns that it may reduce competition and jack up prices.

— Reporting for Reuters by Foo Yun Chee in Brussels; additional reporting by Tom Polansek in Chicago.

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The deal is one of several reshaping the agricultural chemicals and seeds market, even as these deals trigger fears among some farmers that bigger, more powerful suppliers could be better placed to push up prices and economize on developing new herbicides and pesticides.

Reuters reported on Feb. 2 that the deal, the largest foreign acquisition by a Chinese company, would be cleared with conditions.

The European Commission said planned asset sales would address its competition concerns.

“It is important for European farmers and ultimately consumers that there will be effective competition in pesticide markets, also after ChemChina’s acquisition of Syngenta,” European Competition Commissioner Margrethe Vestager said in a statement.

ChemChina will sell a large chunk of its subsidiary Adama’s pesticide, herbicides and insecticides business, its seed treatment products for cereals and sugar beet and a substantial part of its plant growth regulator business for cereals.

American Vanguard (Amvac) said it struck a deal with Adama to acquire three crop protection product lines, without disclosing financial terms.

Bernstein Research analyst Jeremy Redenius said that since Adama focuses on established crop chemicals that have lost patent protection, potential buyers of other assets would likely be from the same industry segment, such as FMC, Nufarm and Sumitomo Chemical.

Redenius added that BASF was unlikely to bid due to its focus on patented substances.

BASF and FMC declined to comment. Australia’s Nufarm and Japan’s Sumitomo were not immediately available for comment outside regular business hours.

Syngenta said the EU’s go-ahead was a major step toward closing the transaction, expected in the second quarter of 2017.

Some of Syngenta’s pesticides will also be put on the block. The world No. 1 pesticides maker sells its products in more than 90 countries under such brand names as Acuron, Axial, Beacon and Callisto. It sells seeds such as cereals, corn, rice, soybeans and vegetables.

U.S. antitrust authorities also nodded the deal through on Tuesday on condition ChemChina divests three products. Canada’s Competition Bureau signed off on the deal in February.

According to a Syngenta spokesperson, the last remaining countries to provide regulatory clearance on the deal include China, India and Mexico.

The EU’s approval came a week after it cleared the US$130 billion Dow Chemical and DuPont merger in return for hefty asset sales, including global research and development facilities.

— Foo Yun Chee is a Reuters correspondent covering competition issues from Brussels. Additional reporting for Reuters by Ludwig Burger in Frankfurt.

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The European Commission had been concerned that the merger of two of the biggest and oldest U.S. chemical producers would leave few incentives to produce new herbicides and pesticides in the future. The deal is one of a trio of mega-mergers that will reshape the industry and consolidate six companies into three.

Asset sales would ensure competition in the sector and benefit European farmers and consumers, the Commission said.

“We need effective competition in this sector so companies are pushed to develop products that are ever safer for people and better for the environment,” European Competition Commissioner Margrethe Vestager said in a statement.

“Our decision today ensures that the merger between Dow and DuPont does not reduce price competition for existing pesticides or innovation for safer and better products in the future.”

The two other big deals in the industry are ChemChina’s $43 billion bid for Syngenta and Bayer’s acquisition of Monsanto (all figures US$).

Dow and DuPont said they were still on target for $3 billion in cost synergies and $1 billion in growth benefits.

The deal is still to be approved by regulators in the U.S., Brazil, China, Australia and Canada, but the companies said they were confident of clearance in all remaining jurisdictions.

Weighty decision

The 1,000-page decision underlined the significance of the merger. In return for the EU green light, DuPont will divest large parts of its global pesticides business, including its global research and development organization.

The unit makes herbicides for cereals, oilseed rape, sunflower, rice and pasture and insecticides for insect control for fruits and vegetables.

Dow, in turn, will sell two acid co-polymer manufacturing facilities in Spain and the U.S., as well as a contract with a third party through which it buys ionomers. The company has already found a buyer in South Korea’s SK Innovation .

“The main surprises here are the inclusion of the pesticides and the exclusion of any kind of seed assets,” Bernstein analysts wrote in a note.

The analysts also said they had expected EU to be concerned about the concentration of seed sales, and that they would require Dow to divest its corn seeds business.

“We see the required divestments here as smaller than we originally expected, due to the exclusion of seed assets.”

Antitrust experts said the regulator’s demand to sell large swathes of R+D facilities could set the benchmark for future deals.

Lobbying group Friends of the Earth Europe criticized the EU decision, saying that the three deals would lead to three companies controlling about 70 per cent of the world’s agrichemicals and more than 60 per cent of commercial seeds.

“This decision to allow Dow Chemicals and DuPont to form the world’s biggest agribusiness company will give giant corporations an even tighter toxic grip on our food and countryside. For the public and nature such mergers are marriages made in hell,” said Adrian Bebb from Friends of the Earth Europe.

Sources said last week that ChemChina’s bid for Syngenta could be approved this week but the timing could slip. Bayer and Monsanto are set to ask for EU approval in the coming months.

— Reporting for Reuters by Foo Yun Chee and Vishaka George.

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The European Commission could announce its approvals for both companies at the same time either Monday or Tuesday, the people said.

It is rare for the Commission to announce joint merger decisions but it probably makes sense in this case as both companies are in the agrochemicals sector, the sources said.

Both megadeals in the agrochemicals industry, and another one involving Bayer and Monsanto, have triggered fears among regulators and farmers that the merged companies may slow down the pipeline of new herbicides and pesticides.

Commission spokesman Ricardo Cardoso declined to comment. Dow did not immediately respond to an email for comment. A Syngenta spokesman said the Swiss company and ChemChina were confident of closing the deal in the second quarter of the year.

The EU antitrust enforcer has set an April 4 deadline for the Dow and DuPont deal, and April 12 for the ChemChina and Syngenta deal.

U.S. chemical companies Dow and DuPont managed to address EU competition concerns with a revised package of concessions which included asset sales and transfer of research and development activities to a rival, sources told Reuters last month.

ChemChina, which is making the largest foreign acquisition by a Chinese company, won over regulators with its pledge to divest a couple of national product registrations, including existing products and a few in the pipeline, in more than a dozen EU countries, other sources have told Reuters.

— Foo Yun Chee is a Reuters correspondent covering competition cases from Brussels. Additional reporting for Reuters by Michael Shields in Zurich.

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