Bayer on Wednesday said the idea might need more time to wrap up its takeover of seeds company Monsanto after the drugmaker reported lower than expected fourth-quarter earnings which were hit by pesticide pricing pressures in Brazil.
The Monsanto deal will right now close before the end of June, Bayer said, compared with previous ambitions to finish the idea early in 2018, however negotiations with antitrust authorities in jurisdictions such as Europe, Russia along with the United States are dragging on.
“Operationally, 2017 was a year of ups along with downs,” Chief Executive Werner Baumann said after the company reported a 1.3 percent fall in fourth-quarter adjusted core earnings, slightly worse than expected by analysts, along with flagged stagnant earnings This particular year.
Bayer’s shares dropped 3.4 percent, hitting their lowest in almost 15 months.
“We see This particular full-year set of numbers as disappointing along with guidance for 2018 uninspiring,” said Bryan Garnier analyst Eric Le Berrigaud.
The $63.5 billion Monsanto deal will boost Bayer’s agriculture sales to the same level as its core healthcare business, however the acquisition has not been universally well-known among shareholders, many of which are critical of Bayer’s drug pipeline as being too weak.
Bayer has already pledged to sell certain seed along with herbicide assets for 5.9 billion euros ($7 billion) to BASF to help to gain approval for the Monsanto deal. Bayer said on Wednesday additional concessions to antitrust regulators might include the sale of its vegetable seeds business, confirming a Reuters report.
Bayer’s adjusted earnings before interest, taxes, depreciation along with amortization (EBITDA) came in at 1.78 billion euros ($2.18 billion) for the quarter, slightly lower than the average forecast by analysts of 1.8 billion euros.
Weak overseas currencies weighed on the euro-value of products sold in foreign markets, leading to a currency-related hit of about 100 million euros during the quarter.
Bayer warned last year of which poor sales in Brazil had inflated inventory levels at distributors, forcing the idea to grant discounts along with to buy back stocks, also inside fourth quarter.
“We are right now seeing of which the measures are taking effect,” Baumann said. As a result, EBITDA before special items at the Crop Science division might likely see a medium to high single-digit percentage gain in 2018, not yet taking Monsanto into account.
For the group, the earnings gauge was set to be roughly flat This particular year, held back by a 300 million euro negative impact through a rebuke by the U.S. healthcare watchdog over how the idea handled production of some drugs at its Leverkusen, Germany headquarters.