Overview of Business Performance

Key Events

We made significant progress in 2017 with our strategic objectives. We considerably reduced our interest in Covestro AG from 64.2% as of December 31, 2016, to 24.6% a year later, generating proceeds of some €4.7 billion. We placed a further 4% of Covestro AG shares into Bayer Pension Trust e.V., which held an 8.9% interest as of December 31, 2017. As a result of the reduction in the shares held and the conclusion of a control termination agreement with Covestro AG, Bayer ceded de facto control over Covestro AG in the third quarter of 2017. Following deconsolidation as of September 30, 2017, the Covestro Group was presented as an associate for the first time. Continuing operations Sales and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations. are now comprised exclusively of the life science businesses.

In January 2018, we divested a further 10.4% of Covestro shares, bringing our current direct interest in that company to 14.2%. It remains Bayer’s intention to achieve full separation from Covestro.

In connection with the planned acquisition of Monsanto and the related customary closing conditions, including approval by the relevant antitrust and other authorities, Bayer in 2017 received half of the regulatory approvals it had applied for. We are cooperating with the authorities in the ongoing procedures, including in the United States and Europe, as we look to close the transaction in the second quarter of 2018.

In October 2017, furthermore, we signed an agreement concerning the sale of certain Crop Science businesses to BASF SE. The transaction is subject to an approval process by the regulatory authorities and is contingent upon the successful closing of Bayer’s acquisition of Monsanto. The transaction volume is €5.9 billion.

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