In order to reduce its mountain of debt, Bayer is drastically reducing its dividend. For the past year, this only resulted in a distribution of eleven cents per share – which corresponds to the calculated minimum amount that Bayer must distribute under the Stock Corporation Act as long as the company remains in the black according to HGB accounting. For the 2022 financial year, Bayer increased the dividend by 40 cents to 2.40 euros per share.
Shareholders have already had to digest price losses of around 30 percent last year. Bayer cannot get the wave of lawsuits over the weed killer glyphosate under control in the USA, has to cut a significant number of jobs and is confronted with demands from investors for a split. On the Frankfurt Stock Exchange, Bayer shares fell by more than two percent to 28.30 euros on Tuesday morning, but recovered somewhat later and were only down 0.4 percent at 28.77 euros in the afternoon. Bayer is only valued at 28 billion euros on the stock exchange – that is much less than the company spent on the $63 billion takeover of Monsanto. The share has lost around 70 percent since it was purchased in June 2018.
Bayer justified the change in dividend policy on Monday evening with the level of debt in combination with high interest rates and a tense situation with free cash flow. The group had forecast a freely available cash inflow of zero for 2023 – the new CEO Bill Anderson criticized this situation as “unacceptable”. “Reducing our debt and increasing our flexibility are among our top priorities,” he said. “Our changed dividend policy, which incorporated suggestions from investors and which we decided upon after careful consideration, will help us in this regard.”