Bayer Group (BAYN.XE) announced that it has made significant progress in its plan to reduce its shareholding in Covestro Group (1COV.XE). Bayer, as a drug and chemical giant, is preparing to strengthen its relationship with Monsanto (MON).
Bayer said it reduced its directly held shares of Covestro, which was reduced from its previous 53.3% to 44.8% on Tuesday. Covestro is the original Bayer high-tech polymer business unit and was independent from Bayer in 2015. Bayer's reduction of Covestro shares occurred in the form of off-exchange book purchases. The transaction price was 62.25 euros (US$70.11) per share, which was lower than the Covention closing price of 66.03 euros. This transaction totaled 1.07 billion euros in total. .
Bayer plans to invest in Covestro's pension fund trust, which will further reduce its shareholding percentage by 4%.
At the same time, Bayer has also issued a one-billion-euro three-year convertible bond that can be directly converted into Covestro shares when it expires in 2020 after three years.
As a condition of the transaction, the shares transferred this time will have a lock-up period of 90 days.
Bayer announced that it will dispose of its shares in Covestro in the medium and long term.