The purchase marks a change of tack for the world’s biggest chemical company, which until now has watched from the sidelines as $160 billion worth of deals created integrated seed and agrochemical giants like DowDupont Inc. In the past, Bock questioned the returns from the large-scale investments needed to develop and promote GM crop traits. In the competition for the Bayer assets, he beat out Syngenta AG, which was acquired by China National Chemical Corp. for $46 billion last year, people familiar with the situation have said.

With Bayer’s need to gain regulatory approval for the Monsanto deal, BASF hasn’t ended up overpaying, according to Baader Bank analyst Markus Mayer. Others disagree. The price paid looks “very high,” according to Bryan Garnier. Bernstein’s Redenius said the price was 2 billion euros higher than his 4 billion-euro estimate.

BASF is paying 15 times earnings before interest, taxes, depreciation and amortization, said Mayer, adding the price is below the valuation paid in previous transactions. BASF said the deal will be earnings per share accretive in the first year.

Central to the deal was the cultural fit between the two German companies and the research capability included in the package that makes it a viable asset, Bock said on the call with investors.

For now, shareholders remain ambivalent toward the strategy shift. BASF stock was 0.3 percent higher at 89.56 euros as of 1:52 p.m. in Frankfurt. Bayer rose 1.3 percent to 118.35 euros.

Stopped Clock

For Bayer, it’s a decisive move designed to gain regulatory approval for the Monsanto purchase. European Union competition officials recently stopped the clock on their antitrust probe to hunt for more information on how the deal will affect competition for key products used by farmers.

Selling assets can help companies eliminate potential antitrust problems when seeking regulatory approval for a deal. U.S., EU and Brazilian authorities are investigating how combining Bayer and Monsanto might affect the price and supply of key products for farmers.

It isn’t immediately clear which other assets will need to be divested to secure regulatory approval. Bayer last week said it had been asked to provide more information to EU regulators, but didn’t disclose what was being requested. The company on Friday also didn’t identify any other assets it may consider selling.

The deal could also mean that Bayer can reduce the size of its planned capital increase to fund Monsanto to below $10 billion, Baader’s Mayer said.

“We are taking an active approach to address potential regulatory concerns, with the goal of facilitating a successful close of the Monsanto transaction," Bayer CEO Werner Baumann said in a separate statement. “At the same time, we are pleased that, in BASF, we have found a strong buyer for our businesses."

The businesses to be acquired by BASF had 2016 sales of about 1.3 billion euros and earnings before interest, taxes, depreciation and amortization of about 385 million euros. The transaction is subject to the closing of Bayer’s acquisition of Monsanto and regulatory approval, and the companies expect it will be completed in the first quarter of 2018.

Stood Apart

BASF stood apart from competitors by not building a seed business. Bock had concluded that its past in-house program to create a genetically modified starch-rich potato called Amflora was unproductive and expensive. Controversy about GM crops in its home European market meant BASF struggled to commercialize Amflora, which produced modified starch for the paper industry.

The German company is gaining herbicides marketed under the Liberty, Basta and Finale brands, and seed businesses in select markets, including canola hybrids in North America, oilseed rape mainly in Europe, cotton in the Americas and Europe as well as soybean in the Americas, according to BASF’s statement.

Having watched ChemChina acquire Syngenta, and failing to intervene in deal discussions involving Monsanto and DuPont, BASF risked being the only agricultural products company not able to offer farmers the full gamut of crop protection and seeds unless it jumped on the Bayer assets.

“It ends the ‘will they, won’t they’ speculations around BASF’s interest in entering the seeds business, fueled by BASF’s historic communication to the market that they had no interest in seed,” Fred Ward, a managing director at Olivetree Financial. “Investors were nervous by BASF’s historic reluctance to enter the market. BASF also brings with it the balance sheet and experience to innovate.”

Bank of America Merrill Lynch and Credit Suisse are Bayer’s financial advisers, while Sullivan & Cromwell, Dentons, Cohen & Grigsby and Redeker, Sellner & Dahs gave legal advice. Deutsche Bank advised BASF.