Comprehensive M&A data with integrated detailed company information
‘Bayer to dispose of remaining 14.2 per cent in Covestro’
Posted on Friday, 12 January 2018 14:40
After offloading 10.4 per cent of its stake in Covestro, seed maker Bayer is looking to sell the remaining 14.2 per cent holding in the German plastic company as it closes in on its USD 66.00 billion acquisition of Monsanto.
Based on the Leverkusen-based group’s close of EUR 86.80 on 10th January 2018, a disposal of the approximately 28.76 million shares still held by the pharmaceutical business could be worth about EUR 2.50 billion.
Bayer has been looking to shed its stock in Covestro since last year, having sold about EUR 6.50 billion worth of stock; although it still owns an additional 8.9 per cent of the group through Bayer Pension Trust.
The German giant narrowed its holding in the target on 10th January 2018, raising around EUR 1.81 billion by selling a 10.4 per cent stake to unnamed institutional investors, which exceeded expectations of fetching EUR 1.50 billion.
While it is unclear how Bayer will offload the remaining 14.2 per cent, Reuters reported the disposal of some of its investment in Covestro means the company will need less cash from shareholders than initially expected to buy Monsanto.
Should the companies receive approval from the European commission on 5th March 2018, the buyer will launch a cash call shortly after.
Bayer shed another asset last year as it agreed to sell its Liberty and LibertyLink herbicide and seed businesses for EUR 5.90 billion to BASF in October.
The company is a global enterprise with its core operations in the life sciences, healthcare and agricultural fields.
In 2016, Bayer had about 99,600 employees, sales of around EUR 34.90 billion, capital expenditures totalled EUR 2.20 billion and research and development expenses reached EUR 4.40 billion.
Covestro is among the leading suppliers of premium polymers and generated a 57.4 per cent increase in earnings before interest, taxes, depreciation and amortisation to EUR 2.57 billion, on a 19.5 per cent increase in sales to EUR 10.62 billion in the nine months ended 30th September 2017.
© Zephus Ltd