German drugs and pesticides group Bayer said on Friday it had further reduced to just under 25 percent its holding in Covestro, the plastics producer which it demerged in 2015, by selling a 6.9 percent stake for 1 billion euros ($1.2 billion).
Bayer, which is trying to complete its $66 billion takeover of U.S. seeds giant Monsanto (MON.N) 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 Sept 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 percent.
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 Oct 26.
The Bayer Pension Trust continues to hold a 8.9 percent stake in Covestro.
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