Covestro Eyes Acquisitions, Says Finance Chief - Report
May 28 2016 - 8:50AM
Dow Jones News
By Ulrike Dauer
FRANKFURT--Covestro AG (1COV.XE), the German specialty-plastics
business that Bayer AG (BAYN.XE) floated last October, plans to
invest part of the money raised in its 5 billion euro ($5.56
billion) debt-issuance program in acquisitions to boost its
profitability, Chief Financial Officer Frank Lutz told German
magazine Euro am Sonntag.
Covestro is looking to build up know-how or strengthen its
coatings, adhesives and specialties business through an
acquisition, Mr. Lutz told the magazine in an interview published
Saturday. He didn't specify the size of any potential deals, but
said the company's free cash flow should remain above the
three-year average this year.
Covestro mainly produces polyurethanes and polycarbonates, which
are used in the automobile, furniture and construction industries.
Its products are also used in mattresses, car seats and soccer
balls.
Bayer, which last week made a $62 billion offer to buy U.S.
competitor Monsanto Co. (MON), still holds a stake of about 64% in
the business. Covestro needs to pay off a EUR2.1 billion loan from
Bayer this year. In March, Covestro placed EUR1.5 billion of the
EUR5 billion with investors. The EUR5 billion debt issuance plan is
a long-term plan.
Mr. Lutz also said the company was on track to meet its
full-year targets.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
(END) Dow Jones Newswires
May 28, 2016 08:35 ET (12:35 GMT)
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