What else is there to worry about Bayer after the $2.6 billion sale of its "edge" business?

On October 9, Bayer announced that it had formally completed the sale of its environmental science business to international private equity firm Cinven for US$2.
6 billion (€2.
6 billion), following an agreement reached in March, with net proceeds to be used to reduce the company's net financial debt
.
Since acquiring Monsanto in 2018, Bayer has been under greater debt pressure
.
As of June 30, Bayer's net financial debt rose to 36,575 million euros, an increase of 5.
9 percent
from March 31 this year.

Cinven is a leading international private equity firm whose funds invest in six key sectors: business services, consumer products, financial services, healthcare, industrials and TMT (technology, media and telecommunications), with offices
in London, New York, Frankfurt, Paris, Milan, Madrid, Guernsey and Luxembourg.

Rodrigo Santos, member of the Bayer Management Board and President of Bayer's Crop Science division, said that the divestiture will allow Bayer to focus on the successful implementation of its core agricultural business and the growth strategy of Crop Science, which will become an independently operated company called Envu
.

According to its website, Aviyou is committed to becoming a leading global provider of solutions in the non-agricultural sector of professional pest, disease and weed management such as vector control, professional pest management, industrial vegetation management, forestry, as well as golf and ornamental plants
.
Headquartered in Kerry, North Carolina, USA, the company operates in more than 100 countries and employs approximately 900 employees from Bayer
.

According to the financial report, in 2021, after adjusting for exchange rate and asset portfolio, Bayer's sales increased by 8.
9% to 44.
081 billion euros, of which the Crop Science division as its core division increased by 11.
1% to 20.
207 billion euros, and its prescription drug division received 18.
349 billion euros; the health consumer goods division generated sales of 5.
293 billion euros
.
Previously, Bayer's Crop Science division covered agricultural biologics, crop protection, digital farming systems, fruit and vegetable and environmental science
.
In 2021, Bayer's environmental science business generated sales of around EUR 600 million, which is a relatively small
proportion of sales in the entire Crop Science division.
In 2019, the business also generated sales of around 600 million euros, and its development has not improved
significantly in recent years.

As early as last February, Bayer was ready to
sell the business unit.
Last March, Bayer announced a series of decisions to accelerate the implementation of its Crop Science division's strategy, including plans to divest its environmental science business
.

In the second quarter of 2022, Bayer CropScience achieved global sales and profit growth, leading Bayer's Pharmaceuticals and Consumer Health divisions
.
Thanks to a significantly improved market environment, CropScience sales increased by 17.
2 percent to EUR 6,461 million, double-digit growth in Latin America and the EMEA region, as well as expansion
in North America and Asia Pacific.

While Bayer's CropScience division is doing well under its strategy of optimizing its leadership team and divesting its "edge" business, it is worth noting that the development of the prescription drug business in its three divisions is slightly worrying
.
In the second quarter of this year, sales of its prescription drug business increased by 2.
1% to 4.
818 billion euros, relying on sales of two blockbuster drugs, aflibercept and rivaroxaban, but the aflibercept patent expires in 2025, rivaroxaban patents in China have expired in 2020, and the patents in European countries such as Germany and France will also expire
in 2023.