Bayer will divest its entire vegetable-seed business as it aims to complete the deal in the second quarter, the Leverkusen, Germany-based company said Wednesday in a statement. The April 5 deadline for a decision from European Union merger regulators is nearing, and farming technology and the seed portfolio have emerged as key final details in the talks.
“This does not affect our expectation of a successful conclusion to the regulatory review,” CEO Werner Baumann said in the statement. Bayer said it may also out-license businesses.
The deal with Monsanto has eclipsed other strategic moves at Bayer and is poised to transform one of the world’s oldest drugmakers – the inventor of aspirin – into more of a force in the agriculture business than it is in pharmaceuticals.
Bayer, which previously said it expected to conclude the Monsanto purchase early this year, said Wednesday it’s confident it can allay the concerns of EU antitrust regulators.
Even without Monsanto’s help, the company predicted its agriculture unit will grow again this year after seeing sales and profit drop in 2017 due to a tough business environment in Brazil.
On a group level, adjusted earnings before interest, taxes, depreciation, amortisation this year will probably be in line with their 2017 level, while sales will reach about 35 billion euros (US$43 billion), Bayer said.
Last year’s Ebitda before special costs fell 0.3% to 9.3 billion euros, matching the average estimate of analysts surveyed by Bloomberg.
The prescription-drug division, still Bayer’s biggest unit, was a bright spot. Unit sales climbed 4.3% to 16.8 billion euros, driven by a spike in revenue from blood thinner Xarelto, eye medicine Eylea and the cancer drugs Xofigo and Stivarga.
The company’s over-the-counter health unit continued to struggle, however. Sales of that business will probably be on level with last year once currencies and portfolio changes are taken into account, and profit will decline in 2018, Bayer said.