Chemicals Bayer suffers from Monsanto takeover

Bayer is recording considerable losses due to its weak agricultural division and the takeover of Monsanto. The company's shares have fallen to a 20-year low.

Bayer is struggling with the financial consequences of the Monsanto takeover, which has put the company in a difficult situation. The DAX-listed company's turnover fell by 3.6 percent to 9.97 billion euros in the third quarter. While the over-the-counter medicines division recorded a slight increase, adjusted consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) slumped by almost 30 percent to 939 million euros. The loss amounted to just under 4.2 billion euros, mainly due to write-downs in the agricultural division.

The challenge of Monsanto

The acquisition of Monsanto in 2018 has burdened Bayer with numerous glyphosate lawsuits that are costing the company billions. In the third quarter, Bayer wrote off goodwill of almost EUR 3.3 billion in the agricultural chemicals division, into which Monsanto was integrated. Since the takeover, amortization of goodwill in this division amounts to a total of 12.9 billion euros.

Bayer CEO Bill Anderson explained that the market development in the agricultural sector, especially in Latin America, was worse than expected. In addition, prices in the crop protection business are under pressure, which clouds the outlook for the coming year.

Share price in free fall

Bayer's share price has fallen to its lowest level in 20 years, after the shares fell by 14 percent at times to just over EUR 21 on the stock exchange. Since the Monsanto takeover in summer 2018, Bayer's stock market value has fallen from just under 92 billion euros to around 21 billion euros. In 2015, before the Monsanto takeover was initiated, Bayer was at times the most valuable company in Germany with a value of around 120 billion euros.