The world’s largest maker of seeds and pesticides

Bayer, the pharmaceuticals and chemicals group, has announced a €6 billion capital increase to finance its $66 billion takeover of Monsanto, which cleared its last big regulatory hurdle last week. The deal is set to create the world’s largest maker of seeds and pesticides by far. The combined company will have sales of about €20 billion, based on 2017 figures. The cash call is smaller than that for which Bayer initially planned because Monsanto cut its debt as the various antitrust investigations into the deal proceeded. Also, Bayer made more from selling down its stake in plastics maker Covestro than initially envisaged. Bayer announced yesterday evening that it would issue nearly 75 million new shares, priced at €81 each, to existing investors… generating gross proceeds of €6 billion… Bayer was obliged to make $9 billion worth of divestments to BASF, the German chemicals firm, as a condition of DoJ approval…  The German company will have to divest businesses in which it and Monsanto compete directly, including its cotton, canola, soyabean and vegetable seed unit, along with its Liberty herbicide division, which competes with Monsanto’s Roundup. Bayer will also have to sell its seed treatment business to allay vertical competition concerns, as well as some intellectual property and “pipeline” research and development projects.
Guy Chazan