Bayer AG, Leverkusen, Germany, announced Tuesday that it plans to contribute about €528 million ($590 million) into its pension plan as part of an effort to reduce its stake in polymer company Covestro, Bayer said in a news release.
The drug manufacturer said it is depositing 8 million Covestro shares into Bayer Pension Trust “in the near future,” which consists of 4% of Covestro's shares. At Tuesday's close, Covestro shares were €66.03.
The contribution is in addition to “an accelerated bookbuilding procedure with a targeted volume of €1 billion” and “offering €1 billion of bonds exchangeable into Covestro shares maturing in 2020,” the news release said.
As of Dec. 31, Bayer's worldwide pension assets totaled €26.9 billion, while pension obligations totaled €28.1 billion, for a funding ratio of 95.7%, according to the company's most recent annual report.
Bayer spokesmen Michael Preuss and Christian Maertin were not available by press time.
