Bayer Considers Selling Smaller Crop-Care Assets

(Bloomberg) -- Bayer AG is considering selling some smaller crop-care brands as Chief Executive Officer Werner Baumann prunes the company’s portfolio and deals with mounting litigation costs, people familiar with the matter said.

The German drugs and chemicals maker is reviewing assets deemed peripheral to its core pesticide and seed operations, the people said, asking not be identified discussing confidential information. Operations that already exist as separate legal entities could be among the potential divestment candidates, the people said.

Bayer is looking to streamline its agriculture offerings after lowering its earnings forecasts amid weak biofuel demand and tough competition for soy products. Its adjusted crop science revenue fell 12% in the third quarter to 3 billion euros ($4.2 billion), with particularly bad declines in North America, and Bayer predicted reduced growth prospects for the business.

Deliberations are at an early stage, and there’s no certainty they will lead to a transaction, the people said. A representative for Bayer declined to comment.

Legal troubles have mounted for Bayer since its $63 billion takeover of Monsanto Co. in 2018. The company announced $12 billion worth of settlements in June related to Monsanto products, including the Roundup weedkiller.

Bayer shares have fallen by about a third this year, giving the company a market value of 48 billion euros. Since the Monsanto deal, Bayer has sold the Coppertone sunblock business and Dr. Scholl’s foot-care brand, along with its animal health division.

Chemicals dealmaking has been picking up recently, with Partners Group Holding AG agreeing in July to buy Iberian crop-protection company Rovensa. More recently, Syngenta AG reached a deal to acquire Valagro to expand in so-called biological solutions, a market that’s expected to nearly double over the next five years.

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