Sector News

Bayer cuts Monsanto synergy target by $300 million due to divestments

May 28, 2018
Chemical Value Chain

Bayer said positive synergy effects from the planned takeover of U.S. seeds maker Monsanto would be about $300 million below its previous target because it will sell more businesses than initially expected to get antitrust approval.

Bayer Chief Executive Werner Baumann again threw his weight behind the deal, despite higher antitrust hurdles and delays in the regulatory reviews, speaking to shareholders at the annual general meeting on Friday.

“I’m convinced that this acquisition has very great potential for creating value for our company, our stockholders and our customers,” Baumann said, adding he expected the deal to be approved and closed in the near future.

If the deal is not closed by June 14, Monsanto could withdraw from the takeover agreement and seek a higher price.

The last major hurdle to clear is the go-ahead from U.S. regulators for the deal, worth $62.5 billion including debt, but Bayer has already come to an agreement in principle on the terms of approval with the Department of Justice.

It has agreed to sell assets, which include seed, crop chemicals and digital farming activities, with revenues of 2.2 billion euro ($2.6 billion) for 7.6 billion euros to rival BASF.

Combining with takeover target Monsanto will have synergy effects of about $1.2 billion on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from 2022, Bayer said – less than the $1.5 billion targeted when the transaction was agreed in September 2016.

By Patricia Weiss

Source: Reuters

comments closed

Related News

June 24, 2022

BASF to build commercial scale battery recycling black mass plant in Schwarzheide, Germany

Chemical Value Chain

BASF will build a commercial scale battery recycling black mass plant in Schwarzheide, Germany. This investment strengthens BASF’s cathode active materials (CAM) production and recycling hub in Schwarzheide. The site is an ideal location for the build-up of battery recycling activities given the presence of many EV car manufacturers and cell producers in Central Europe.

June 24, 2022

Clariant restructures business units, reorganizes leadership

Chemical Value Chain

Clariant says it is reducing its number of businesses from five to three, by merging units, under a reorganization that is in line with the company’s purpose-led strategy and cultural transformation. The moves will position Clariant for long-term sustainable growth, the company says.

June 24, 2022

Chemicals & Plastics Procurement: what to expect in the second half of 2022

Chemical Value Chain

Chemicals & plastics industry has the most diversified end-use market across all manufacturing industries. The industry returned to growth in 2021 but a supply chain crunch prevented it from becoming stronger. The market is likely to stabilize in the second half of 2022 with a supply-demand balance.