"Bayer-Monsanto deal completed this year"

Bayer reports a successful year in 2016, both strategically and operationally. “We again posted a record operating performance – and are making good progress with the agreed acquisition of Monsanto as well,” Management Board Chairman Werner Baumann said on Wednesday at the Financial News Conference in Leverkusen.

“We have every reason to be optimistic about the future and started the new business year well,” said Baumann. He raised the prospect of further growth in sales and earnings in 2017.

Bayer last year took a major strategic step forward with the agreed acquisition of Monsanto, said Baumann. “This transaction is the perfect fit for our strategy of seeking leadership positions with our Life Science activities in attractive, innovation-driven markets.” Once the businesses have been combined, Bayer would be able to create substantial additional value in the long term through more innovation, stronger growth and greater efficiency. At a special meeting in December 2016, Monsanto’s stockholders approved the transaction. Bayer has also made progress in the necessary antitrust proceedings and has already applied for clearance from some two-thirds of around 30 authorities. Bayer and Monsanto are working closely with the authorities. Bayer remains confident of closing the transaction before the end of 2017.

Crop Science
In the agriculture business, Bayer posted sales of EUR 9,915 million (2015: EUR 10,128 million; Fx & portfolio adj. plus 0.1 percent). “The market environment for our Crop Science Division remained weak last year, particularly in Latin America,” said Baumann. Crop Science nonetheless held sales at the prior-year level, the Bayer CEO explained. The considerable 6.9 percent (Fx adj.) decline in Latin America was compensated by gains in the other regions. Sales rose by 3.9 percent (Fx adj.) in North America, 2.7 percent (Fx adj.) in Asia/Pacific and 1.8 percent (Fx adj.) in Europe/Middle East/Africa.

Seeds (seeds and traits) in particular developed positively, growing by 8.3 percent (Fx & portfolio adj.). The Crop Protection business posted gains of 4.0 percent for Fungicides and 4.1 percent for SeedGrowth (seed treatment products) on a currency- and portfolio-adjusted basis. By contrast, the Insecticides business was down sharply (Fx & portfolio adj. minus 13.3 percent). At Herbicides, sales declined slightly (Fx & portfolio adj. minus 2.2 percent). Environmental Science registered a sales gain of 4.5 percent (Fx & portfolio adj.).

EBITDA before special items of Crop Science came in level with the previous year (plus 0.6 percent) at EUR 2,421 million (2015: EUR 2,406 million). A positive currency effect of about EUR 140 million and higher selling prices were offset by lower volumes, higher research and development expenses and higher impairment losses on receivables.

Monsanto
Bayer is also making good progress with refinancing the agreed acquisition of Monsanto, continued Dietsch. The company has successfully implemented both the acquisition financing of USD 57 billion and the first equity measure in the amount of EUR 4 billion. “Transactions of this magnitude don’t necessarily go smoothly. The fact that we were so successful in these financing activities is also evidence of Bayer’s good reputation in the capital markets,” remarked Dietsch. Further refinancing of the acquisition financing is planned to include corporate and hybrid bonds and the raising of additional equity via a rights issue. However, should Bayer identify options to further optimize financing structures, instruments and also the timing of financing steps in the context of the transaction, the company will consider these.

For more information:
www.bayer.com