German chemicals group Bayer AG is edging towards a deal to buy the agrochemicals arm of Franco-German drugs group Aventis SA for around 7.25 billion euros ($6.35 billion), including debt, industry sources said on Tuesday.
The two sides are still finalising an agreement after three weeks of exclusive talks, which will vault Bayer to number two spot in the global crop protection business.
Aventis is expected to issue an update on the progress in negotiations when it reports second-quarter results on Thursday.
Full details are still being worked out and the deal may not complete until the end of the year.
Analysts had previously valued CropScience, which Aventis is looking to sell in order to focus on faster-growing pharmaceuticals, at six to eight billion euros, including two billion euros in debt.
Strasbourg-based Aventis said on July 10 it had chosen Bayer as "financially and socially" the best partner for CropScience, in which it owns 76 per cent and Schering 24 per cent.
Bayer, under pressure to reshape its business, is eager to secure a leading position in the concentrated agrochemicals market, even though sales are growing in low single digits against 10 per cent growth for pharmaceuticals.
Aventis had initially considered an initial public offering for the CropScience business, before concluding that a trade sale offered most value.
Germany's BASF AG was a close runner-up in the auction for the unit, which had also attracted interest from U.S. firms Dow Chemical Co, Monsanto Co and DuPont Co. Lyon-based CropScience, which has herbicide, fungicide, environmental science, seed and insecticide operations and employs 15,300 people, reported sales of four billion euros in 2000.
Adding CropScience would more than double Bayer's existing business, bringing it close to global leader Syngenta AG with annual sales of nearly eight billion euros.