With the sale of another chunk of Covestro (Leverkusen / Germany; www.covestro.com), the Bayer group (Leverkusen; www.bayer.com) has largely completed its exit from the plastics sector. In the first week of May, the former chemical giant now focused on life science placed around 29m shares (14% of the engineering plastics producer’s equity) with institutional investors at a price of EUR 75.50 each, securing the targeted EUR 2.2 bn in proceeds. Bayer’s chief financial officer, Johannes Dietsch, said total proceeds of EUR 9 bn from the Covestro divestment have exceeded expectations.

Following the transaction, Bayer now holds only 6.8% of its former group company Bayer MaterialScience, which it floated on the Frankfurt stock exchange in 2015 – see Plasteurope.com of 08.10.2015. Proceeds from the latest flotation – of shares the group acquired from its own pension trust – will be used to repay an exchangeable bond maturing in 2020. After this date, all of Covestro will be in free float, barring a merger, private equity buyout or sale to another company. Following a sluggish start, the plastics producer’s shares have continuously gained momentum, rising by 32% in 2017 before backpedalling this year by 11% on fears that the market boom for polyurethane and polycarbonate may be peaking.

Bayer is poised to acquire its US agrochemicals rival Monsanto as soon as it receives clearance by US antitrust authorities, expected imminently. The European Commission gave the green light at the end of March. Both the German and the US group were once major players in the plastics market. They formerly operated a US-based chemicals and plastics joint venture called Mobay, which among other things produced polyurethane. Setting a modest measuring stick for future transactions, Bayer later bought out Monsanto’s stake.