No plans to acquire rival Syngenta: Bayer CEO

CNBC with Reuters
Sygenta not our target: Bayer CEO

The CEO of German drugmaker Bayer has quashed any talk of acquiring its competitor Syngenta, which is currently being pursued by U.S. firm Monsanto.

"I would say that Syngenta is not a logical acquisition target for Bayer because there is quite some overlap in the businesses," Bayer's CEO Marijn Emmanuel Dekkers told CNBC.

"Both Syngenta and Bayer are very strong in chemical crop protection: herbicides, insecticides, fungicides that farmers use to fight off disease for their crops. So no, that is not a logical target for Bayer."

Bayer's underlying core earnings increased by one third in the second quarter, helped by lower raw material costs at its plastics division, as well as a gain in prescriptions of new drugs such a stroke prevention pill Xarelto.

"We are marketing Xarelto in 60-70 countries at the moment so the introduction has been very successful," said Dekkers. "In the United States at the moment, Xarelto has more market share than all of the other oral anti-coagulants combined of our competitors.

"We are helping millions and millions of patients with this product avoid a stroke as a result of heart inefficiencies."

Second-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to 2.90 billion euros ($3.21 billion), above market expectations of 2.68 billion, while revenue gained 18 percent to 12.09 billion, also beating the analyst consensus.

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Dekkers also confirmed plans for a separate listing of its MaterialScience unit, which will be renamed Covestro, as the division's adjusted EBITDA rose by almost 90 percent to 506 million euros.

"We will be listing in Frankfurt in Germany. We have said that MaterialScience will be an independently traded company at the latest the middle of next year, 2016. So we have about nine months or so left to do that," said Dekkers.

The CEO also explained the reasons for MaterialScience's rising earning.

"Volume continues to increase, the demand is increasing and that fills our manufacturing capabilities up more than before," he said. "Because of low oil prices we have lower raw materials prices and we are getting a little bit more margin as a result or those lower costs."

Analysts had predicted just 420 million euros in adjusted EBITDA on average for the unit, which makes chemicals for rigid insulation foams and upholstery as well as transparent plastics.

Bayer still expects 2015 adjusted EBITDA to grow by "a high-teens percentage", including positive currency effects of about 5 percent, which it had previously put at around 8 percent.

"For a company the size of Bayer with almost 15 billion euro in sales, upper teens earnings increases is quite significant and it is a challenge to get there but we are confident we will get there," added Dekkers.

Bayer cut its 2015 revenue target to roughly 47 billion euros from 48-49 billion previously, accounting for the sale of its blood glucose meters business with about 900 million euros in sales to Panasonic Healthcare in June.