Bayer sells fur­ther stake in Cove­stro for $1.2 bil­lion

The Gulf Today - Business - - 4international -

BER­LIN: Ger­man pharma and pes­ti­cides group Bayer said on Fri­day it had fur­ther re­duced to just un­der 25 per cent its hold­ing in Cove­stro, the plas­tics pro­ducer which it de­merged in 2015, by sell­ing a 6.9 per cent stake for 1 bil­lion euros ($1.2 bil­lion).

Bayer, which is try­ing to com­plete its $66 bil­lion takeover of US seeds gi­ant Mon­santo by the end of the year, de­clined to name the buy­ers but said they would be bound by a lock-up agree­ment to not sell the shares un­til at least Dec 11.

The sale was not an open mar­ket trans­ac­tion and there­fore meets a lock-up agree­ment from Septem­ber 13, when Bayer agreed not to place fur­ther shares on the open mar­ket for 90 days.

Be­fore Fri­day’s trans­ac­tion Bayer had al­ready sold three sep­a­rate blocks of shares in Cove­stro this year for 3.7 bil­lion euros, and also raised 1 bil­lion euros in for bonds that it can pay back with Cove­stro shares.

“Through the move, we have taken a ma­jor step to­ward our goal of achiev­ing full sep­a­ra­tion from Cove­stro in the medium term,” Chief Ex­ec­u­tive Werner Bau­mann said in a state­ment.

A spokesman for Bayer said there would be no im­me­di­ate changes to the Cove­stro su­per­vi­sory board as a re­sult of the sale, which takes Bayer’s stake down to 24.6 per cent.

The move means Bayer has ceded con­trol of Cove­stro and will see it need­ing to re­vise its group out­look to take into ac­count of it now be­ing classed as a dis­con­tin­ued op­er­a­tion. Bayer is due to re­port third-quar­ter re­sults on Oc­to­ber 26. The Bayer Pen­sion Trust con­tin­ues to hold a 8.9 per cent stake in Cove­stro.

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