MySheen

The agricultural chemical giant Bayer has made a huge loss in setting aside 84.3 billion for Monsanto, a seed company.

Published: 2024-11-06 Author: mysheen
Last Updated: 2024/11/06, German chemical giant Bayer announced its third-quarter results, showing that the group paid a heavy price for the acquisition of American seed supplier Monsanto, resulting in a quarterly loss of 9.4 billion euros (HK $85.764 billion) before tax and interest, and a net loss of 2.7 billion euros during the period.

German chemical giant Bayer announced third-quarter results, showing that the group paid a heavy price for the acquisition of US seed supplier Monsanto, resulting in a quarterly loss of 9.4 billion euros (HK $85.764 billion) before tax and interest. The net loss for the period was 2.7 billion euros, higher than analysts' expectations of 1 billion euros.

According to the announcement, due to weak demand from farmers for Monsanto products, Bayer made a fair impairment provision and had to write off 9.25 billion euros (HK $84.396 billion). In addition, Bayer made a further $750 million in legal costs for lawsuits against Monsanto's herbicide Roundup, which is accused of causing cancer. Bayer bought Monsanto for US $63 billion (HK $491.4 billion) in 2018.

The provision did not surprise the market, as Bayer disclosed in September that it had to make fair provision for impairment. Wolfgang Nickl, chief financial officer of Bayer, said that in addition to being hit by the COVID-19 epidemic, weak biofuel prices were also one of the reasons for the weak demand for agricultural products in the United States, and the provision was also related to changes in the turnover rate.

In terms of carcinogenic cases, Bayer reached a settlement agreement in principle with 88500 of the 125000 plaintiffs, involving compensation of US $11 billion; this additional allocation of US $750 million mainly reflects the higher-than-expected cost of legal expenses.

 
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