BAYN GR
Bayer AG
Healthcare, Industrial/Transportation, Event Driven/Special Sit
03/06/2017
Presented
| Date | 03/01/2017 |
| Price | €105.60 |
| Market Cap | $99.88B |
| Ent Value | $114.50B |
| P/E Ratio | 18.59x |
| Book Value | €32.46 |
| Div Yield | 0.02% |
| Shares O/S | 849.17M |
| Ave Daily Vol | 2,099,933 |
| Short Int | N/A |
Current
| Price | €26.53 |
| Market Cap | $29.03B |
| Bayer AG is engaged in the development, manufacture and distribution of products in the areas of health care, nutrition and high-tech materials. It operates through the Healthcare, Crop Science and Material Science subgroups, which are supported by three service companies. The Healthcare subgroup consists of the Pharmaceuticals and Consumer Health segments. The Pharmaceuticals segment consists of two business units focusing on prescription products: General Medicine, primarily comprising women's healthcare and cardiovascular health products; and Specialty Medicine, comprising medicines that are mainly prescribed by specialist physicians. The Consumer Health segment includes the Consumer Care, Medical Care and Animal Health divisions. The Consumer Care Division focuses on non-prescription medicines, dietary supplements, and dermatology products. The Medical Care division comprises the businesses with blood glucose meters, contrast-enhanced diagnostic imaging equipment together with the necessary contrast agents, and mechanical systems for treating constricted or blocked blood vessels. The Animal Health division manufactures products for livestock and companion animals. The CropScience subgroup consists of two operating segments: Crop Protection / BioScience and Environmental Science. The Crop Protection segment includes herbicides, fungicides, insecticides and seed treatment units, while BioScience focuses on seeds and plant traits. The Environmental segment offers non-agricultural pest and weed control products. The MaterialScience subgroup develops, manufactures and distributes high-performance products in the areas of polyurethanes, polycarbonates, coating and adhesive raw materials, and functional films. It consists of the Polyurethanes, Polycarbonates, and Coatings, Adhesives, Specialties business units, and the Industrial Operations area. The firm's subgroups are supported by the Business Services, Technology Services and Currenta service companies. The company was founded by Friedrich Bayer and Johann Friedrich Westkott on August 1, 1863 and is headquartered in Leverkusen, Germany. |
Publicly traded companies mentioned herein: Bayer AG (BAYN GR), Monsanto Co (MON)
Highlights
The dynamics around merger arbitrage could be the best investors have seen in ~15 years over the next 12-24 months. The presenter thinks the community as a whole has been “beaten-up”, as the regulatory environment appeared to be heavily influenced by politics/ legislation (as opposed to having a fundamental framework). This made it very difficult to handicap the outcome of deals. Regardless of what the Trump administration’s policy is, he believes it is likely to be more consistent; however, the importance of preserving US jobs could be a risk to certain deals getting done, depending on the likelihood of layoffs (i.e., if there’s no customer/ consumer issue, then would a deal be blocked because people might get fired?). With this setup, he sees a high probability of the Bayer/ Monsanto deal getting done, and likes the risk/ reward in shares of Bayer with the stock trading at a discount to the DAX on his numbers.
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