AgroPages-Bayer reduces its estimate of cost synergy reduction in Monsanto acquisition-Agricultural news

Dow Jones reports:

Bayer AG on last Friday reduced its expected earnings synergies from the Monsanto acquisition, which has forced the company to divest from various businesses worldwide.

The German pharmaceutical and chemicals company said it now expects the deal to deliver an annual contribution of $1.2 billion to earnings before interest, taxes, depreciation and amortization before special items, from 2022 onwards.

The previous figure was $1.5 billion, although Chief Financial Officer Johannes Dietsch had recently admitted in an interview that it would likely be lower.

As part of the acquisition process, Bayer has been required to divest from businesses worldwide.

Bayer also said that it expects the capital increase related to its Monsanto acquisition to be smaller than originally planned, as proceeds from the sale of a Covestro AG (1COV.XE) stake were higher than anticipated. Polymer-maker Covestro was previously part of Bayer, which now owns 6.8% of the company.

"Bayer generated proceeds of over 15 billion euros through the separation from Covestro--around 4.5 billion euros more than expected," said Chief Executive Werner Baumann.