Bayer trims forecasts amid Monsanto buyout

BERLIN: Bayer AG cut its forecast for the year because the euro’s strength is curbing sales as it pushes to close its US$66bil purchase of Monsanto Co.

Sales will drop below last year’s 35 billion euros (US$42bil) while earnings are set to decline by a low-single-digit percentage, the Leverkusen, Germany-based company said in a statement yesterday.

Bayer had previously predicted that sales and profit would show little change without Monsanto and without adjusting for exchange rates.

Bayer repeated that it aims to close the Monsanto acquisition, announced in mid2016, by the end of this quarter.

If the deal isn’t done by June 14, the contract can be cancelled.

One of the oldest drugmakers, the German company is remolding itself into the world’s biggest producer of seeds in the last of three mega-deals that are reshaping the global farming industry.

The two other big players were created when DuPont Co merged with Dow Chemical Co last year and China National Chemical Corp acquired Syngenta AG.

To push through the Monsanto acquisition, Bayer agreed to sell pieces of its agriculture business to BASF SE for about 7.6 billion euros.

Bayer’s own agriculture business showed signs of recovery in the first quarter, the company said, with sales growing in three out of four of the major regions where it operates.

Earnings before interest, taxes, depreciation, amortisation and some special items declined by 6.5% to 1.04 billion euros at the unit.

Bayer repeated its previous forecast that this year’s core earnings per share will remain at about the same level as in last year. — Bloomberg