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(NEW: Success in arbitration with BASF, more details and background)
FRANKFURT (DPA-AFX) – Relief for Bayer shareholders: Contrary to recent fears about the sale of the seed business, the pharmaceutical and agrochemical group should not pay any losses to the chemical group BASF. Shares in Bayer, the leader in the DAX (DAX 40), rose 3.75 percent on Friday to EUR 53.62.
With that, the newspapers halted their recent upswing, which had only started a week ago with the publication of the figures for the second quarter. Since then, they had dropped to about 13 percent.
In 2017 and 2018, Bayer sold most of its seeds and weedkillers business to domestic competitor BASF for €7.4 billion. In doing so, the group wanted to dispel the concerns of the competition watchdogs about excessive market power through the takeover of the US seed giant Monsanto for over 60 billion US dollars.
Competitor BASF had filed an arbitration request in 2019, allegedly because some cost items were not adequately disclosed and some divested businesses were improperly allocated. Bayer denied this. Bayer announced on Friday that the arbitral tribunal had dismissed the lawsuit.
According to reports, BASF had sought more than 1.7 billion euros in interest. Banking analyst Richard Voser of JP Morgan calculated that Bayer is treating around 1.5 billion euros as contingent liabilities in the case. This impending burden on profits is now to be resolved, which corresponds to around three percent of the stock market value.
The analyst at the US bank Citigroup, Peter Werdalt, was also optimistic about Bayer in the morning. Things are getting better and better for the company. Provisions for US glyphosate litigation should also be sizeable. In addition, shares are also considered attractively valuable for Asundexion, the currently-in-development anticoagulant drug and a potential successor to Xarelto.
With an increase of almost 14 percent so far this year, Bayer is one of the few winners in the leading German index DAX, which has fallen by more than 13 percent so far. After a few difficult years, the company has recently benefited from stronger agricultural markets and better prospects for the pharmaceutical division./mis/ck/jha/
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