The foremost objectives of our financial management are to help bring about a sustained increase in Bayer’s value for the benefit of all stakeholders and to ensure the Group’s creditworthiness and liquidity. The pursuit of these goals means reducing our cost of capital, optimizing our capital structure, improving our financing cash flow and effectively managing risk.

Due to the acquisition of Monsanto, the contracted rating agencies have adjusted their ratings and now assess Bayer as follows: S & P Global gives Bayer a long-term rating of BBB and a short-term rating of A-2 with stable outlook. Moody’s gives a Baa1 / P-2 with negative outlook and Fitch an A- / F2 with stable outlook. These investment grade ratings from all three agencies reflect the company’s high solvency and ensure access to a broad investor base for financing purposes. Our stated aim is to also achieve the single “A” rating category in the long term from S & P Global Ratings and Moody’s.

Apart from utilizing cash inflows from our operating business to reduce net financial debt, we are implementing our financial strategy by way of vehicles such as the subordinated hybrid bonds issued in July 2014 and April 2015, the mandatory convertible notes issued in November 2016, the authorized and conditional capital, and a potential share buyback program.

On April 16, 2018, the Republic of Singapore subscribed to 31 million new Bayer shares through a subsidiary, at an issue price close to market prices (for total gross proceeds of €3.0 billion). This corresponded to around 3.6% of the capital stock as of the acquisition date. The transaction increased Temasek’s interest in Bayer AG to approximately 4%. This capital increase against cash contributions excluded the subscription rights of existing shareholders.

On June 3, 2018, with the consent of the Supervisory Board, the Board of Management of Bayer AG resolved to execute a capital increase out of authorized capital against cash contributions and with subscription rights for existing Bayer stockholders. For this purpose, Bayer issued 74,604,156 new registered (no-par value) shares with an entitlement to dividends as of January 1, 2018.

For every 23 Bayer shares they held, stockholders were able to acquire two new shares at a subscription price of €81.00 per new share by way of indirect subscription rights. This option was exercised for 73,343,177 shares. The 1,261,039 shares not subscribed to were purchased by institutional investors at an average placement price of €96.6437 per share under a private placement. After deducting transaction costs, net proceeds totaled €6 billion.

Together with the mandatory convertible notes issued in November 2016, the two capital increases completed the equity component, announced in September 2016, to finance the acquisition of Monsanto.

Capital stock

The capital stock of Bayer AG on December 31, 2018, amounted to €2,387 million (2017: €2,117 million), divided into 932,551,964 (2017: 826,947,808) registered no-par shares, and was fully paid in. Each no-par share confers one voting right.

Authorized and conditional capital

The authorized and conditional capital was comprised as follows:

Authorized and Conditional Capital





Amount / shares





Authorized capital I


April 29, 2014


€530 million


April 28, 2019


Increase the capital stock by issuing new no-par shares against cash contributions and / or contributions in kind, the latter not to exceed €423 million

Authorized capital II


April 29, 2014


€212 million


April 28, 2019


Increase the capital stock by issuing new no-par shares against cash contributions

Conditional capital


April 29, 2014


€212 million / up to 82,694,750 no-par shares


April 28, 2019


Increase the capital stock by granting no-par shares to the holders of bonds with warrants or convertible notes, profit participation certificates or income bonds; the authorizations to issue such instruments are limited to a total nominal amount of €6 billion.

Capital increases are effected by issuing new, registered no-par shares. Stockholders must normally be granted subscription rights. However, subscription rights may be excluded under certain conditions stated in the authorization resolution. Absent a further resolution by the Annual Stockholders’ Meeting on the exclusion of stockholders’ subscription rights, the Board of Management will only use the existing authorizations to increase the capital stock out of the authorized capital or the conditional capital – while excluding stockholders’ subscription rights – up to a total amount of 20% of the capital stock that existed when the respective resolutions were adopted by the Annual Stockholders’ Meeting on April 29, 2014. All issuances or sales of no-par shares or of bonds with warrants or conversion rights or obligations that are effected while excluding stockholders’ subscription rights also count toward this 20% limit. Details of the authorized and conditional capital are provided in the Notice of the Annual Stockholders’ Meeting of April 29, 2014, and on the Bayer website.

The capital increase resolved on June 3, 2018, and implemented thereafter entailed the utilization of €191 million out of authorized capital I. The amount of authorized capital I still available as of December 31, 2018, was therefore €339 million.

The capital increase implemented on April 16, 2018, resulted in the utilization of €79 million out of authorized capital II. The amount of authorized capital II still available as of December 31, 2018, was therefore €133 million.

On November 22, 2016, Bayer placed mandatory convertible notes in the amount of €4.0 billion without granting subscription rights to existing stockholders of the company. The notes, denominated in units of €100,000, were issued by Bayer Capital Corporation B.V., Netherlands, under the subordinated guarantee of Bayer AG. At maturity, the outstanding amount of the notes will be mandatorily converted into registered no-par shares of Bayer AG. The proceeds were the subject of an intra-Group transfer to Bayer AG. The mandatory convertible notes are reflected in payables to subsidiaries until maturity. The issuance of the mandatory convertible notes constituted a utilization of conditional capital.

Accumulated comprehensive income

Accumulated comprehensive income comprises retained earnings and accumulated other comprehensive income. The retained earnings comprise prior years’ undistributed income of consolidated companies and all remeasurements of the net defined benefit liability for pension or other post-employment benefits that are recognized outside profit or loss. The accumulated other comprehensive income comprises exchange differences, the changes in fair values of cash flow hedges and equity instruments (until 2017: changes in fair values of available-for-sale financial assets), the revaluation surplus and reserves for the change in the company’s own credit risk. In 2018, an amount of €4 million (2017: €4 million) corresponding to the annual amortization / depreciation of the respective assets was transferred from the revaluation surplus to retained earnings.


Under the German Stock Corporation Act (AktG), the dividend payment is determined by the distributable profit reported in the annual financial statements of Bayer AG, which are prepared according to the German Commercial Code. Retained earnings were diminished by payment of the dividend of €2.80 per share for 2017. The proposed dividend for the 2018 fiscal year is €2.80 per share, which – based on the current number of shares – would result in a total dividend payment of €2,611 million. Payment of the proposed dividend is contingent upon approval by the stockholders at the Annual Stockholders’ Meeting and therefore is not recognized as a liability in the consolidated financial statements.

Equity attributable to non-controlling interest

The changes in noncontrolling interest in equity during 2017 and 2018 are shown in the following table:

Changes in Noncontrolling Interest in Equity








€ million


€ million

January 1





Changes in equity not recognized in profit or loss





Remeasurements of the net liability under defined benefit pension plans





Changes in fair value of cash flow hedges



Changes in fair value of securities



Exchange differences on translation of operations outside the eurozone





Other changes in equity





Dividend payments





Income after income taxes





December 31





As of December 31, 2018, there were two principal subsidiaries with third-party noncontrolling interest holders: Bayer CropScience Limited, India, where the interest and share of voting rights attributable to noncontrolling interest amounted to 31.3% as of December 31, 2018 (December 31, 2017: 31.3%), and the equity attributable to this noncontrolling interest stood at €42 million (2017: €52 million); and Monsanto India Ltd, India, where the interest and share of voting rights attributable to noncontrolling interest amounted to 20.6% as of December 31, 2018, and the equity attributable to this noncontrolling interest stood at €121 million.

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