(Adds Bayer statement, details)
BRUSSELS, Aug 22 (Reuters) - The European Commission has started an in-depth investigation of Bayer's planned $66 billion takeover of U.S. seeds group Monsanto, saying it was worried about competition in pesticide and seeds markets.
The merger would create the world's largest integrated pesticides and seeds company, the Commission said, adding this limited the amount of competitors selling herbicides and vegetable seeds in Europe.
"The Commission has preliminary concerns that the proposed acquisition could reduce competition in a number of different markets resulting in higher prices, lower quality, less choice and less innovation," the European Commission said in a statement on Tuesday.
Germany's Bayer said it still aimed to have the transaction approved by the end of the year.
"Bayer looks forward to continuing to work constructively with the Commission with a view to obtaining the Commission's approval," the company said in a statement.
Bayer had previously offered commitments aimed at easing the EU's antitrust concerns over the deal with Monsanto, but the company declined to say what was proposed.
If approved, the deal would be the third large tie-up in the agrochemicals sector but other companies also had to offer concessions to win over regulators.
Dow secured regulatory clearance to acquire DuPont only after pledging to sell key research and development activities and other major assets.
And ChemChina had to 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 to win EU approval to buy Syngenta.
The Commission said it was working with regulators in other markets, such as the Unted States, Australia and Brazil to vet the Bayer-Monsanto deal.
Bayer offered to sell its Liberty crop chemical, also known as glufosinate, and canola and cotton seeds that resist the chemical's plant-killing effect to get approval for the deal from South African regulators.
The proposed tie-up has also hit a raw nerve with some environmental activists who fear such a combination would hurt farmers and consumers.
U.S. based campaign group Avaaz said it had submitted a petition with one million signatures to Competition Commissioner Margrethe Vestager, calling on her to block the deal.
"Over a million people are calling on her to block the merger from hell," said Avaaz legal director Nick Flynn.
The Commission said it would asses the deal only from a competition perspective. (Reporting by Robert-Jan Bartunek, additional reporting by Ludwig Burger; editing by Julia Fioretti/Keith Weir)