Bayer Cuts Covestro Stake to 44.8% -- Update

Germany's Bayer AG (BAYN.XE) said it has made substantial progress in further reducing its shareholding in Covestro AG (1COV.XE), as the pharmaceutical and chemicals giant gears up for its planned tie-up with Monsanto Co. (MON).

Bayer said it cut its direct stake in Covestro--Bayer's former high-tech polymers business that was floated in 2015--to 44.8% from 53.3% late Tuesday. It did so by placing 17.25 million Covestro shares in an accelerated bookbuilding after the market had closed. The shares were placed at 62.25 euros ($70.11) each, below Covestro's closing price of EUR66.03, generating proceeds of around EUR1.07 billion.

Bayer's planned deposit of Covestro shares in the Bayer corporate pension trust will reduce its shareholding by a further 4 percentage points, it said.

In addition, Bayer issued EUR1 billion in three-year bonds that can be exchanged for Covestro shares when they mature in 2020.

As part of the transactions, Bayer agreed to a 90-day lockup period.

Bayer had said it plans to fully dispose of its Covestro stake in the medium term.

-Write to Ulrike Dauer at

(END) Dow Jones Newswires

June 07, 2017 03:07 ET (07:07 GMT)