Frankfurt Bayer is making progress with the planned separation from its Environmental Science business unit. According to financial circles, the Leverkusen-based group has selected bidders who are allowed to submit binding offers after an in-depth audit. The financial investors Cinven, CVC and Apax are among the handful of bidders on the so-called shortlist for the division, which could be valued at around 2.5 to 3 billion US dollars if sold, as several people familiar with the matter said. A deal before the end of the year is targeted.
Environmental Science offers products to control pests, diseases and weeds in non-agricultural areas. The range includes products that are intended for golf courses, rail routes and roadsides, warehouses, large kitchens and municipal mosquito control. In 2019, the division achieved sales of 600 million euros.
The Environmental Science division expects operating income of around $ 200 million in 2022, according to financial circles, and could be valued at 13-14 times that. In addition to financial investors, the Swiss agrochemicals group Syngenta, which belongs to ChemChina, also showed interest in the division.
With Environmental Science doing much of its business in the United States, a Syngenta purchase could have posed regulatory hurdles given the US-China tension. Now only financial investors are in the final round. Bayer and the bidders declined to comment or were initially unavailable.
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With the separation from the division, the Leverkusen-based pharmaceutical and agrochemical group wants to concentrate even more on its core business with customers from the agricultural sector. Environmental Science does not have glyphosate products in its portfolio – these products should remain with Bayer in the long term.
Bayer had significantly expanded its agricultural business with the acquisition of the US company Monsanto in 2018. Last year, the business suffered from the consequences of the corona pandemic. In the third quarter of 2021, however, sales in the Crop Science division rose again by 25 percent, thanks to strong demand from farmers and because Bayer was able to raise prices. In the environmental science business, however, sales volumes fell.
More: Bayer exceeds forecasts in the third quarter – and exchanges leadership in the agricultural business