Bayer and Monsanto in $66 B Deal; Hermes, Richemont Drop on Outlook

Sarla Buch
14 Sep, 2016
New York City

Bayer agreed to acquire the U.S.-based Monsanto for $66 billion. Hermes International profit soared 13% to

[R]4:00 PM Frankfurt – Bayer agreed to acquire the U.S.-based Monsanto for $66 billion. Hermes International profit soared 13% to €545 million and said the luxury goods maker may miss its sales growth outlook. Also, Richemont estimated operating profit in the first-half is expected to tumble 45%.[/R]

In London trading, FTSE 100 index gained 29.70 or 0.5% to 6,693.56 and in Frankfurt the DAX index increased 41.46 or 0.4% to 10,430.44.

In Paris, CAC 40 index edged up 1.24 to 4,389.43.

Bayer AG jumped 4.2% to €97.24 after the Germany-based drug and chemical producer agreed to acquire the U.S.-based seeds and pesticides producer Monsanto Company Inc for $128 per share or aggregate value of $66 billion in cash.

The offer represents 44% premium to the closing price of May 9, the day before Bayer’s first written proposal to Monsanto.

Bayer agreed to pay $2 billion in reverse antitrust break fee and reaffirmed its confidence in obtaining the necessary regulatory approvals.

The transaction is expected to close by the end of 2017.

Hermes International SCA plunged 8.2% to €355.40 after the France-based luxury products maker said group revenues in the first-half in June jumped 7% from a year ago to €2.44 billion.

Net profit in the period soared 13% from a year ago to €545 million compared to the €482.5 million.

Hermes abandoned its annual sales outlook and said that the company is facing sales pressure in China but sales in Europe rose 8% in the first-half.

Leoni AG jumped 2.5% to €33.10 after the Germany-based wires, optical fiber and cable maker lowered operating profit estimate to €65 million compared to the earlier estimate of €105 million and kept its fiscal 2016 sales outlook unchanged at €4.4 billion.

Leoni said it incurred a loss of about €40 million due to a case of fraud.

Compagnie Financiere Richemont SA slumped 3.8% to 57.55 Swiss francs after the Switzerland-based jewellery products maker said sales in the first five-months ending in August declined 14%.

The Richemont estimated operating profit in the six-months ending in September to tumble 45% from a year ago period mainly due to restructuring charges of €65 million and the product buy backs.

The result of the first-half ending in September is schedule to be released on November 4.