Bayer to kick off sale of $2.4 bln pest control unit this summer - sources (updated)

Icl

31/03/2021 08:45

(Adds CEO quote on business)
    By Arno Schuetze
    FRANKFURT, March 31 (Reuters) - German chemicals group Bayer
 BAYGn.DE  is preparing to kick off the sale of pest control
unit Bayer Environmental Science (BES) this summer with a price
tag potentially topping 2 billion euros ($2.4 billion), people
close to the matter said. 
    The agrichemicals giant, looking to reduce debt in the wake
of its $63 billion purchase of U.S. peer Monsanto in 2016, is
working with Bank of America  BAC.N  on the sale, the people
said, speaking anonymously as the information is not public.
    While introductory meetings with prospective buyers are
already taking place, an auction will officially start just
before or after the summer break, with the view of signing a
deal by the end of the year, they added. 
    Bayer and Bank of America declined to comment. 
    Bayer is planning to market the unit, which supplies
products like pesticides for golf courses and rodent protection
for warehouses, to peers such as Scotts Miracle-Gro  SMG.N , ICL
 ICL.TA  as well as private equity groups, the sources said.
    BES last year saw revenues increase by 7.6% to 1.1 billion
euros, while most other units of Bayer's CropScience division
saw sales slump on weak trading in North America.
    Bayer is only divesting the business for professional users
with sales of 600 million euros, Chief Executive Werner Baumann
said in an analyst call last month. 
    That part of BES is expected to post earnings before
interest, tax, depreciation and amortisation of about 200
million euros this year and could be valued at 10-12 times that,
the sources said.
    Since the Monsanto acquisition, Bayer has already sold its 6
billion euro animal health business, its stake in 3.5 billion
euro chemicals park Currenta, as well as consumer brands such as
Dr. Scholl's and Coppertone worth about 500 million euros each.
    Its net debt stood at 41.9 billion euros as of December
2020, while its net financial debt stood at 30 billion. 
    ($1 = 0.8527 euros)

 (Reporting by Arno Schuetze. Editing by Alexandra Hudson and
Mark Potter)
 ((arno.schuetze@thomsonreuters.com; +49 30220133648;))