* BASF to pay for Bayer assets with cash
* To take on more than 1,800 employees as part of deal
* Bayer sells assets to gain approval of Monsanto deal
* Transaction conditional upon Monsanto deal going through
* Shares in BASF fall, Bayer rises (Adds analyst comment, further details on transaction, strategic rationale)
FRANKFURT, Oct 13 (Reuters) - BASF has agreed to buy seed and herbicide businesses from Bayer for 5.9 billion euros ($7 billion) in cash, as Bayer tries to convince competition authorities to approve its planned acquisition of Monsanto.
BASF, the world's third-largest maker of crop chemicals, has so far avoided seed assets and instead pursued research into plant characteristics such as drought tolerance, which it sells or licenses out to seed developers.
But Bayer's $66 billion deal to buy U.S. seeds group Monsanto, announced in September 2016, has created opportunities for rivals to snatch up assets that need to be sold to satisfy competition authorities.
Bayer had offered to sell assets worth around $2.5 billion. The European Commission said in August that the divestments offered by Bayer so far did not go far enough and started an in-depth investigation of the deal.
Bayer has to sell the LibertyLink-branded seeds and Liberty herbicide businesses because they compete with Monsanto's Roundup weed killer and Roundup Ready seeds.
LibertyLink seeds, used by soy, cotton and canola growers, are one alternative to Roundup Ready seeds for farmers suffering from weeds that have developed resistance to the Roundup herbicide, also known as glyphosate.
The spread of Roundup-resistant weeds in North America has been a major driver behind Liberty sales.
"BASF's decision to acquire seeds assets represents something of a change to its prior view on its needs to respond to recent industry consolidation in agriculture," Morgan Stanley analysts said.
"Nonetheless, the proposed assets for acquisition are high margin and high growth and represent a sensible bolt-on addition," they added.
The sale to BASF values the assets at around 15 times 2016 operating profit (EBITDA) of 385 million euros, which Bankhaus Lampe analyst Volker Braun said was "reasonable" considering the assets had to be sold anyway.
BASF will finance the acquisition through a combination of cash on hand, commercial paper and bonds. It expects the acquisition to add to its earnings by 2020.
Shares in Bayer rose 1.3 percent to the top of Germany's blue-chip DAX index by 0845 GMT, while BASF fell 0.7 percent.
The businesses Bayer is selling to BASF generated 2016 sales of 1.3 billion euros.
While the Commission could block the deal, it has approved others, such as Dow's tie-up with DuPont and ChemChina's takeover of Syngenta - although only after securing big concessions.
Bayer said it continued to work with the authorities to close the Monsanto deal by early 2018.
As part of the asset sale to BASF, which is conditional upon the Monsanto acquisition going through, more than 1,800 staff, primarily in the United States, Germany, Brazil, Canada and Belgium, will transfer to BASF.
BASF has committed to maintaining all permanent positions, under similar conditions, for at least three years after the deal closes, Bayer said.
As part of the deal, BASF will acquire Bayer's manufacturing sites for glufosinate-ammonium production and formulation in Germany, the United States, and Canada, seed breeding facilities in the Americas and Europe as well as trait research facilities in the United States and Europe.
Bayer said it would use the proceeds of the sale to partially refinance the planned acquisition of Monsanto. It would provide an update on expected synergies from the acquisition by the time the deal closes.
BofA Merrill Lynch and Credit Suisse acted as financial advisors to Bayer. Its legal advisors are Sullivan & Cromwell, Dentons, Cohen & Grigsby and Redeker, Sellner & Dahs. ($1 = 0.8442 euros) (Reporting by Maria Sheahan; Editing by Tom Pfeiffer and Keith Weir)