By Ludwig Burger
(Reuters) – Bayer has agreed to sell a unit making pest control chemicals for landscaping and facility management to private equity group Cinven for $2.6 billion to cut debt and focus its crop science business on its core farming clientele.
Cinven said in a separate statement it would seek to continue to drive innovation and growth of the business, called Environmental Science Professional, which is a North Carolina-headquartered business with 800 staff.
It supplies products like insect and rodent control as well as weed killers for green keepers, forest rangers and warehouse managers.
Agrichemicals and seeds giant Bayer is looking to reduce debt in the wake of its $63 billion purchase of U.S. peer Monsanto in 2018, which came with the added burden of billions in litigation costs.
Group net debt was 33 billion euros ($36 billion) at the end of 2021, up 10% from a year earlier, as it paid 4.3 billion euros to settle with some of the residential gardeners claiming Monsanto’s weedkiller Roundup caused their cancer.
An upfront payment of $1.5 billion for the takeover of U.S. biotech firm Vividion Therapeutics increased liabilities further.
Since the Monsanto acquisition, Bayer has already sold its 6 billion euro animal health business, its stake in 3.5-billion-euro chemicals park Currenta, as well as consumer brands such as Dr. Scholl’s and Coppertone worth about 500 million euros each.
Back in 2016, Bayer sold a smaller part of the environmental science unit that catered to hobby gardeners to French home and garden products maker SBM Developpement.
Bank of America acted as financial adviser while Hengeler Mueller was legal adviser to Bayer on the latest deal.
Cinven said its advisers included Credit Suisse and law firm Clifford Chance.
($1 = 0.9058 euros)
(Additional reporting by Kirsti Knolle; Editing by Emma Thomasson and Mark Potter)
