Bayer starts selling a $ 2.4 billion pest control unit this summer – Sources

FRANKFURT (Reuters) – German chemical company Bayer is preparing to start selling its pest control unit Bayer Environmental Science (BES) this summer at a price of potentially over 2 billion euros (2.4 billion US dollars).

FILE PHOTO: The Bayer AG logo can be seen in a showroom of the German pharmaceutical manufacturer, where the press conference on the annual results will take place on February 27, 2020 in Leverkusen. REUTERS / Wolfgang Rattay / File Photo

The agribusiness giant, looking to reduce debt after buying US counterpart Monsanto for $ 63 billion in 2016, is working with Bank of America on the sale, people said, speaking anonymously, as the information is not public are.

While introductory meetings are already taking place with potential buyers, an auction will officially start shortly before or after the summer break with a view to signing a contract by the end of the year, they added.

Bayer and Bank of America declined to comment.

Bayer plans to commercialize the unit, which supplies products such as pesticides for golf courses and rodent protection for warehouses, to peers such as Scotts Miracle-Gro, ICL and private equity groups.

BES posted sales growth of 7.6% to EUR 1.1 billion last year, while most of the other units in Bayer’s CropScience business unit posted a decline in sales due to weak trade in North America.

Bayer is selling the business only for professional users with a turnover of 600 million euros, said CEO Werner Baumann in an analyst meeting last month.

That part of BES is expected to post earnings before interest, taxes, depreciation and amortization of around € 200 million this year and could be 10-12 times that, the sources said.

Since taking over Monsanto, Bayer has already had its EUR 6 billion animal health business, its stake in the EUR 3.5 billion Chemical Park Currenta and consumer brands such as Dr. Scholl’s and Coppertone, each worth around 500 million euros, were sold.

The net debt in December 2020 was 41.9 billion euros, the net financial debt was 30 billion euros.

($ 1 = 0.8527 euros)

Reporting by Arno Schuetze. Adaptation by Alexandra Hudson and Mark Potter

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