Historic posts are reprinted verbatim from their original source.

Souce: Financial Times Canada, October 3, 2001

LEVERKUSEN, Germany, – Bayer AG said on yesterday it was buying Aventis’s CropScience unit for 7.25 billion euros (US$6.63-billion), including 1.9 billion euros in debt, vaulting it to number two in the global agrochemicals market.
Analysts said the deal, which had been discussed for months, fitted Aventis SA’s plan to focus on faster-growing pharmaceuticals and to reduce its debt, and was crucial for Bayer in gaining critical mass in the sector.

The deal, the biggest acquisition in Leverkusen-based Bayer’s history, is expected to result in some 4,000 job cuts or 15% to 18% of the combined workforce at CropScience and Bayer’s existing crop protection business.

Franco-German drugs group Aventis will reap 3.7 to 3.8 billion euros from the deal, a source close to the transaction said.
The acquisition will propel Bayer — which has been hit hard by the withdrawal in August of its cholesterol-lowering drug Baycol on safety grounds — into the number-two spot from number seven in the US$33-billion-a-year agrochemicals market behind Switzerland’s Syngenta AG.

“The deal is a strategic must for Bayer and enables them to secure a strong market position at a fair price,” said Michael Vara, analyst at Commerzbank.

But it will not boost earnings until 2004 and will increase Bayer’s debt burden to 15 billion euros next year — when the transaction is due to close — limiting its ability to invest in developing its undersized pharmaceuticals business.

Chief executive Manfred Schneider said he hoped the group would again be in a position to finance larger purchases in the medium term but said nothing was currently planned for crop protection or chemicals.

Bayer reiterated it was keen to maintain the majority interest and management control in any future health care partnership and that any takeover in the next two or three years would be limited in scope.

An industry source said the group would still have the financial clout to pursue acquisitions and may now be better placed to consider a 50-50 joint venture for its pharmaceuticals arm.