Obligation Bayris 0.375% ( XS2199265617 ) en EUR

Bayris

100 % ⇌

Allemagne

XS2199265617 ( en EUR )

0.375% par an ( paiement annuel )

06/07/2024 - Obligation échue

Prospectus brochure de l'obligation Bayer XS2199265617 en EUR 0.375%, échue

Bayer est une société multinationale allemande spécialisée dans les sciences de la vie, opérant dans les secteurs de la santé, de l'agriculture et des produits de consommation.

L'obligation Bayer (XS2199265617), émise en Allemagne en euros, avec un taux d'intérêt de 0,375% et une maturité au 06/07/2024, a été remboursée à 100% à sa date d'échéance.

Prospectus dated 2 July 2020

Bayer Aktiengesellschaft
(incorporated in the Federal Republic of Germany)
1,500,000,000 0.375% Notes due 2024
ISIN XS2199265617, Common Code 219926561, WKN A289QE, Issue price: 99.550 per cent.
1,500,000,000 0.750% Notes due 2027
ISIN XS2199266003, Common Code 219926600, WKN A289QF, Issue price: 99.277 per cent.
1,500,000,000 1.125% Notes due 2030
ISIN XS2199266268, Common Code 219926626, WKN A289QG, Issue price: 99.921 per cent.
1,500,000,000 1.375% Notes due 2032
ISIN XS2199266698, Common Code 219926669, WKN A289QH, Issue price: 99.901 per cent.

Bayer Aktiengesellschaft (the "Issuer") will issue on 6 July 2020 (the "Issue Date") 1,500,000,000 0.375% Notes due 2024 (the
"2024 Notes"), 1,500,000,000 0.750% Notes due 2027 (the "2027 Notes"), 1,500,000,000 1.125% Notes due 2030 (the
"2030 Notes") and 1,500,000,000 1.375% Notes due 2032 (the "2032 Notes", and together with the 2024 Notes, the 2027 Notes and
the 2030 Notes, the "Notes" and each a "Series") each in the denomination of 100,000 per Note.
The Notes will be governed by the laws of the Federal Republic of Germany ("Germany").
The 2024 Notes will bear interest on their aggregate principal amount at the rate of 0.375 per cent. per annum from and including the
Issue Date to but excluding 6 July 2024 (the "2024 Notes Maturity Date"). Interest on the 2024 Notes will be payable annually in
arrear on 6 July of each year, commencing on 6 July 2021. Unless previously redeemed or repurchased and cancelled, the 2024 Notes
will be redeemed at par on the 2024 Notes Maturity Date.
The 2027 Notes will bear interest on their aggregate principal amount at the rate of 0.750 per cent. per annum from and including the
Issue Date to but excluding 6 January 2027 (the "2027 Notes Maturity Date"). Interest on the 2027 Notes will be payable annually
in arrear on 6 January of each year, commencing on 6 January 2021 (short first coupon). Unless previously redeemed or repurchased
and cancelled, the 2027 Notes will be redeemed at par on the 2027 Notes Maturity Date.
The 2030 Notes will bear interest on their aggregate principal amount at the rate of 1.125 per cent. per annum from and including the
Issue Date to but excluding 6 January 2030 (the "2030 Notes Maturity Date"). Interest on the 2030 Notes will be payable annually
in arrear on 6 January of each year, commencing on 6 January 2021 (short first coupon). Unless previously redeemed or repurchased
and cancelled, the 2030 Notes will be redeemed at par on the 2030 Notes Maturity Date.
The 2032 Notes will bear interest on their aggregate principal amount at the rate of 1.375 per cent. per annum from and including the
Issue Date to but excluding 6 July 2032 (the "2032 Notes Maturity Date"). Interest on the 2032 Notes will be payable annually in
arrear on 6 July of each year, commencing on 6 July 2021. Unless previously redeemed or repurchased and cancelled, the 2032 Notes
will be redeemed at par on the 2032 Notes Maturity Date.
The Issuer may, at its option, redeem each Series of Notes prior to their respective maturity date on the terms set forth in § 5 of the
respective terms and conditions of the Notes (the "Terms and Conditions").

Each Series of Notes will initially be represented by a temporary global note in bearer form (each a "Temporary Global Note").
Interests in each Temporary Global Note will be exchangeable, in whole or in part, for interests in a corresponding permanent global
note (each a "Permanent Global Note" and together with the Temporary Global Notes, the "Global Notes") not earlier than 40 days
after the Issue Date (the "Exchange Date"), upon certification as to non-U.S. beneficial ownership.
This prospectus (the "Prospectus") constitutes a prospectus within the meaning of Article 6.3 of Regulation (EU) No 2017/1129 of
the European Parliament and of the Council of 14 June 2017 (as amended, the "Prospectus Regulation"). This Prospectus will be
published in electronic form together with all documents incorporated by reference on the website of the Luxembourg Stock Exchange
(www.bourse.lu).
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier, Luxembourg ("CSSF") in its capacity
as competent authority under the Prospectus Regulation. The CSSF only approves this Prospectus as meeting the standards of
completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval should neither be considered
as an endorsement of the Issuer that is subject of this Prospectus nor of the quality of the securities that are the subject of this
Prospectus. Investors should make their own assessment as to the suitability of investing in the Notes.
This Prospectus will be valid until 2 July 2021 and may in this period be used for admission of the Notes to trading on a regulated
market. In case of a significant new factor, material mistake or material inaccuracy relating to the information included in this
Prospectus which may affect the assessment of the Notes, the Issuer will prepare and publish a supplement to the Prospectus without
undue delay in accordance with Article 23 of the Prospectus Regulation. The obligation of the Issuer to supplement this Prospectus
will cease to apply once the Notes have been admitted to trading on the regulated market of the Luxembourg Stock Exchange and at
the latest upon expiry of the validity period of this Prospectus.
Application has been made to the Luxembourg Stock Exchange for each Series of Notes to be listed on the official list of the
Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated
market. The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of Directive 2014/65/EU of the
European Parliament and of the Council of 15 May 2014 on markets in financial instruments (as amended, "MiFID II").
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes in any jurisdiction where such
offer or solicitation is unlawful.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act")
and subject to certain exceptions, the Notes may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons.
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area ("EEA") or the United Kingdom. For these purposes, a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within
the meaning of Directive (EU) 2016/97 (as amended, the "Insurance Distribution Directive"), where that customer would not qualify
as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by
Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them
available to retail investors in the EEA or the United Kingdom has been prepared and therefore offering or selling the Notes or
otherwise making them available to any retail investor in the EEA or the United Kingdom may be unlawful under the PRIIPs
Regulation.
Prospective purchasers of the Notes should ensure that they understand the nature of the Notes and the extent of their exposure to
risks and that they consider the suitability of the Notes as an investment in the light of their own circumstances and financial condition.
Investing in the Notes involves certain risks. Please review the section entitled "Risk Factors" beginning on page 6 of this Prospectus.
Joint Bookrunners and Co-ordinating Banks
Citigroup
Deutsche Bank
Mizuho Securities
UniCredit Bank
Joint Bookrunners
BNP PARIBAS
Commerzbank
Goldman Sachs International
J.P. Morgan
MUFG

RESPONSIBILITY STATEMENT
The Issuer with its registered office in Germany accepts responsibility for the information contained in this Prospectus
and hereby declares that the information contained in this Prospectus is, to the best of its knowledge, in accordance with
the facts and contains no omission likely to affect its import.
The Issuer further confirms that (i) this Prospectus contains all relevant information with respect to the Issuer (also
referred to as "Bayer AG" herein) and its consolidated subsidiaries taken as a whole ("Bayer", "we", "us", "our" or the
"Bayer Group") and to the Notes which is material in the context of the issue and the offering of the Notes, including all
relevant information which, according to the particular nature of the Issuer and of the Notes is necessary to enable
investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position,
profits and losses, and prospects of the Issuer and the Bayer Group and of the rights attached to the Notes; (ii) the
statements contained in this Prospectus relating to the Issuer, the Bayer Group and the Notes are in every material respect
true and accurate and not misleading; (iii) there are no other facts in relation to the Issuer, the Bayer Group or the Notes
the omission of which would, in the context of the issue and offering of the Notes, make any statement in the Prospectus
misleading in any material respect; and (iv) reasonable enquiries have been made by the Issuer to ascertain such facts and
to verify the accuracy of all such information and statements.
NOTICE
No person is authorised to give any information or to make any representation other than those contained in this Prospectus
and, if given or made, such information or representation must not be relied upon as having been authorized by or on
behalf of the Issuer or Citigroup Global Markets Limited, Deutsche Bank Aktiengesellschaft, Mizuho Securities Europe
GmbH, UniCredit Bank AG, BNP Paribas, Commerzbank Aktiengesellschaft, Goldman Sachs International, J.P. Morgan
Securities plc and MUFG Securities (Europe) N.V. (together, the "Joint Bookrunners").
This Prospectus should be read and understood in conjunction with any supplement hereto and with all documents
incorporated herein or therein by reference.
The legally binding language of this Prospectus is English except for the Terms and Conditions in respect of which
German is the legally binding language.
In this Prospectus, all references to "", "EUR" or "Euro" are to the currency introduced at the start of the third stage of
the European economic and monetary union, and as defined in Article 2 of Council Regulation (EC) No. 974/98 of 3 May
1998 on the introduction of the Euro, as amended. References to "US$" are to United States dollars. References to
"billions" are to thousands of millions.
Each investor contemplating purchasing any Notes should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. This Prospectus does not constitute an
offer of Notes or an invitation by or on behalf of the Issuer or the Joint Bookrunners to purchase any Notes. Neither this
Prospectus nor any other information supplied in connection with the Notes should be considered as a recommendation
by the Issuer or the Joint Bookrunners to a recipient hereof and thereof that such recipient should purchase any Notes.
This Prospectus reflects the status as at its date. The offering, sale and delivery of the Notes and the distribution of the
Prospectus may not be taken as an implication that the information contained herein is accurate and complete subsequent
to the date hereof or that there has been no adverse change in the financial condition of the Issuer since the date hereof.
To the extent permitted by the laws of any relevant jurisdiction, none of the Joint Bookrunners, any of its affiliates or any
other person mentioned in the Prospectus, except for the Issuer, accepts responsibility for the accuracy and completeness
of the information contained in this Prospectus or any other documents incorporated by reference and accordingly, and to
the extent permitted by the laws of any relevant jurisdiction, none of these persons accept any responsibility for the
accuracy and completeness of the information contained in any of these documents. The Joint Bookrunners have not
independently verified any such information and accept no responsibility for the accuracy thereof.
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This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such
offer or solicitation.
The distribution of this Prospectus and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted
by law. Persons into whose possession this Prospectus comes are required to inform themselves about and to observe any
such restrictions. For a description of the restrictions see the section "Subscription and Sale of the Notes Selling
Restrictions" below. In particular, the Notes have not been and will not be registered under the Securities Act and are
subject to United States tax law requirements. Subject to certain exceptions, the Notes may not be offered, sold or
delivered within the United States of America or to U.S. persons as defined in Regulation S under the Securities Act
("Regulation S").
For the avoidance of doubt, the content of any website referred to in this Prospectus does not form part of this Prospectus
and the information on such websites has not been scrutinized or approved by the CSSF as competent authority under the
Prospectus Regulation.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET: PROFESSIONAL INVESTORS AND ECPS
ONLY
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of the
Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional clients
only, each as defined in MiFID II; and (ii) all channels for distribution of the Notes to eligible counterparties and
professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a
"distributor") should take into consideration the manufacturers' target market assessment; however, a distributor subject
to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either adopting or
refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PRIIPS REGULATION / PROSPECTUS REGULATION / PROHIBITION OF SALES TO EEA AND UK
RETAIL INVESTORS
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise
made available to any retail investor in the EEA or the United Kingdom. For these purposes, a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer
within the meaning of the Insurance Distribution Directive, where that customer would not qualify as a professional client
as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by the PRIIPs
Regulation for offering or selling the Notes or otherwise making them available to retail investors in the EEA or the
United Kingdom has been prepared and therefore offering or selling the Notes or otherwise making them available to any
retail investor in the EEA or the United Kingdom may be unlawful under the PRIIPs Regulation.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or accepting an offer to
purchase, any Notes (or any beneficial interests therein) from the Issuer and/or the Joint Bookrunners the foregoing
representations, warranties, agreements and undertakings will be given by and be binding upon both the agent and its
underlying client.
STABILISATION
IN CONNECTION WITH THE ISSUE OF THE NOTES, CITIGROUP GLOBAL MARKETS LIMITED (THE
"STABILISING MANAGER") (OR ANY PERSON ACTING ON BEHALF OF ANY STABILISING MANAGER)
MAY OVER-ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET
PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER,
STABILISATION MAY NOT NECESSARILY OCCUR. ANY STABILISATION ACTION MAY BEGIN ON OR
AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE
NOTES IS MADE AND, IF BEGUN, MAY CEASE AT ANY TIME, BUT IT MUST END NO LATER THAN THE
EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE
ALLOTMENT OF THE NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE
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CONDUCTED BY THE STABILISING MANAGER (OR ANY PERSON ACTING ON BEHALF OF THE
STABILISING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements, including statements using the words "believe",
"anticipate", "intend", "expect", "will", "plans", "may" or other similar terms. This applies in particular to statements
under the caption "Description of the Issuer and the Bayer Group" and statements elsewhere in this Prospectus relating
to, among other things, the future financial performance, plans and expectations regarding developments in the business
of the Issuer and Bayer Group. These forward-looking statements are subject to a number of risks, uncertainties,
assumptions and other factors that may cause the actual results, including the financial position and profitability of the
Issuer or the Bayer Group, to be materially different from or worse than those expressed or implied by these forward-
looking statements. Neither the Issuer nor the Joint Bookrunners do assume any obligation to update such forward-looking
statements and to adapt them to future events or developments.
ALTERNATIVE PERFORMANCE MEASURES
Certain terms used in this Prospectus and financial measures presented in the documents incorporated by reference are
not recognised financial measures under International Financial Reporting Standards as adopted by the European Union
("IFRS") ("Alternative Performance Measures") and may therefore not be considered as an alternative to the financial
measures defined in the accounting standards in accordance with generally accepted accounting principles. The Issuer has
provided these Alternative Performance Measures because it believes they provide investors with additional information
to assess the operating performance and financial standing of Bayer Group's business activities. The definition of the
Alternative Performance Measures may vary from the definition of identically named alternative performance measures
used by other companies. The Alternative Performance Measures for Bayer Group presented by the Issuer should not be
considered as an alternative to measures of operating performance or financial standing derived in accordance with IFRS.
These Alternative Performance Measures have limitations as analytical tools and should not be considered in isolation or
as substitutes for the analysis of the consolidated results or liabilities as reported under IFRS.
For further information, please see "Description of the Issuer and the Bayer Group - Alternative Performance Measures".

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TABLE OF CONTENTS
RISK FACTORS................................................................................................................................................................. 6
TERMS AND CONDITIONS OF THE 2024 NOTES ..................................................................................................... 13
TERMS AND CONDITIONS OF THE 2027 NOTES ..................................................................................................... 31
TERMS AND CONDITIONS OF THE 2030 NOTES ..................................................................................................... 49
TERMS AND CONDITIONS OF THE 2032 NOTES ..................................................................................................... 67
USE OF PROCEEDS ....................................................................................................................................................... 85
DESCRIPTION OF THE ISSUER AND THE BAYER GROUP .................................................................................... 86
TAXATION WARNING ................................................................................................................................................. 103
SUBSCRIPTION AND SALE OF THE NOTES ........................................................................................................... 104
GENERAL INFORMATION ......................................................................................................................................... 106
DOCUMENTS INCORPORATED BY REFERENCE .................................................................................................. 108

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RISK FACTORS
Before deciding to purchase the Notes, investors should carefully review and consider the following risk factors and the
other information contained in this Prospectus. Should one or more of the risks described below materialise, this may
have a material adverse effect on the business, prospects, shareholders' equity, assets, financial position and results of
operations (Vermögens-, Finanz- und Ertragslage) or general affairs of the Issuer or the Bayer Group. Moreover, if any
of these risks occur, the market value of the Notes and the likelihood that the Issuer will be in a position to fulfil its
payment obligations under the Notes may decrease, in which case the holders of the Notes could lose all or part of their
investments. Factors which the Issuer believes may be material for the purpose of assessing the market risks associated
with the Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the Notes, but
the Issuer may be unable to pay interest, principal or other amounts on or in connection with the Notes for other unknown
reasons than those described below. Additional risks of which the Issuer is not presently aware could also affect the
business operations of the Bayer Group and have a material adverse effect on the business activities and financial
condition and results of operations of the Bayer Group. Prospective investors should read the detailed information set
out elsewhere in this Prospectus (including any documents incorporated by reference herein) and reach their own views
prior to making any investment decision.
Words and expressions defined in the Terms and Conditions shall have the same meanings in this section.
The following risk factors are organized in categories depending on their respective nature.
Potential investors should, among other things, consider the following:
Risks relating to the Issuer and Bayer Group
Strategic Risks
Social and Macroeconomic Trends including the COVID-19 pandemic
A deterioration in public perception toward Bayer represents a risk. For example, modern agricultural methods, such as
the application of certain classes of crop protection products and the use of genetic engineering, are often the subject of
intense public debate and can adversely affect our reputation. The risk of an increasingly negative public debate that is
not primarily based on science may, for example, lead to legislative and regulatory decisions that are unfavourable to us,
significantly limiting the use of our products or even resulting in voluntary or mandated product withdrawals.
Moreover, negative developments of a macroeconomic nature, such as crises in important sales markets for Bayer, could
adversely impact our Crop Science business and reduce our earnings. Our markets are cyclical and are shaped by
economic developments and factors including fluctuating weather conditions and pest pressure that may adversely impact
our business.
The ongoing COVID-19 pandemic has already resulted in global containment actions leading to a sudden stop of various
economic activities. The pandemic bears the risk of a significant decline in global consumption, unfavourable geopolitical
and macroeconomic effects. Such developments could potentially lead to consequences for Bayer such as a decline in
sales, delayed product registrations, higher regulatory pressure in general, disruptions in our supply chain including the
inability to source certain materials or increased input prices. Our earnings, working capital and cash flows as well as our
ability to achieve our strategic objectives might be negatively impacted.
Market Developments
In the Crop Science Division, we could face increased competition in the seed and crop protection industry. New
competitors entering the market as well as aggressive marketing and pricing strategies not only for generic products
could negatively impact our profitability. In addition, increasing digitalization in the agriculture sector could lead to the
rise of new players and alter the market, potentially impacting value creation at our crop protection business. The
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unexpected development of resistances, which could impact market growth or the profitability of our products, represents
a further risk.
The risk of existing business models undergoing rapid change as a result of digitalization and new digital products is also
present in the Consumer Health Division. Digitalization is a key factor in gaining a competitive advantage. If we fail to
adequately integrate this development into our existing business models, we could lose customers and market share.
Regulatory Changes
Our business activity is subject to extensive regulations that may change. For example, further restrictions could be
imposed on the sale and use of various crop protection products or the pricing of pharmaceutical products could be more
strictly regulated. For instance, in June 2020, the U.S. Court of Appeals for the Ninth Circuit issued a ruling against the
U.S. Environmental Protection Agency that vacates current U.S. registrations of certain low-volatility dicamba, affecting
also certain dicamba-based products of Bayer. Residues of agrochemical products, pharmaceutical compounds or
microplastics in the environment could also become subject to more stringent regulation. In addition, regulatory changes
could affect agricultural imports from other parts of the world and therefore our business in those regions. Regulatory
changes could also cause uncertainty over our products' patent protection, potentially resulting in financial losses that
may even include the repayment of license fees. Regulatory changes may also lead to higher product development costs
and longer development times or even necessitate adjustments to our product portfolio, which in turn may negatively
impact our reputation.
Business Strategy
In the Pharmaceuticals Division in particular, we look to supplement our organic growth through acquisitions and / or
inlicensing. The strategic measures aimed at achieving inorganic growth involve heightened challenges, in part due to the
increasing difficulty in identifying suitable acquisition or inlicensing candidates on economically acceptable terms.
One of the challenges for our Crop Science Division lies in enhancing agricultural productivity through the use of digital
tools, such as data analysis. In addition, new digital business models will emerge. These developments entail risks and
uncertainties.
Operational Risks
Research and Development
Technological advances in pharmaceutical product development may represent a risk for us should we not be in a position
to play a role in shaping such advances.
The need to identify a sufficient number of research candidates represents a challenge. We cannot ensure that all of the
products we are currently developing or will develop in the future will obtain their planned approval / registration or
achieve commercial success. These goals may not be reached if, for example, we are unable to satisfy technical or capacity
requirements or meet time constraints in product development, fail to achieve study objectives or do not allocate financial
resources optimally. Delays or cost overruns may occur during product registration or launch.
In the Crop Science Division, we face challenges in developing and introducing product solutions in agriculture, including
longer and more costly development cycles or stricter regulatory requirements.
Information Technology
Our business and production processes and our internal and external communications are dependent on global IT systems.
This means that system reliability and the confidentiality of internal and external data is of fundamental importance to us.
If the risk of a breach of data confidentiality, integrity or authenticity, for example due to (cyber) attacks, were to
materialize, it could lead to the manipulation and / or the uncontrolled outflow of data and knowledge, and to reputational
damage. Such attacks may also be carried out by in-house personnel. Our business and / or production processes could
also be temporarily disrupted by (cyber) attacks.
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Supply of Products
Despite all precautions, operations at our sites may be disrupted by fires, power outages, process changeovers including
those required by regulatory authorities or plant breakdowns for example. In addition, some of our production facilities
are located in areas that may be affected by natural disasters such as flooding or earthquakes. These risks can lead to
production disruptions or stoppages, result in personal injury and damage to our reputation, lead to declines in sales and
/ or margins, and necessitate the reconstruction of damaged infrastructure. If we are unable to meet product demand, sales
may undergo a structural decline because patients then receive alternative treatments and may not switch back to our
products.
Disruptions at our suppliers may also negatively impact our ability to supply products. Certain materials, particularly in
our Pharmaceuticals Division, are offered by only a small number of suppliers.
Marketing, Sales and Distribution
New product launches present particular challenges for our marketing and distribution organization since assumptions
about aspects such as the market and market circumstances may not materialize as anticipated. As a result, product launch
concepts including those related to clinical trials and the planning or implementation of the distribution strategy could
turn out to be inefficient or inadequate in terms of scheduling. In addition, if competitors' marketing activities surpass our
own efforts in this regard, this may represent a risk for sales of our products.
Human Resources
Skilled and dedicated employees are essential for Bayer's success. Difficulties in recruiting, hiring and retaining urgently
needed specialized employees (on a regional level) also in view of competition among employers and in employee
development could have significant adverse consequences for the company's future development. It is also possible that
organizational changes that are not implemented appropriately or transparently may impair employee motivation or
increase employee turnover.
Finance and Tax Risks
We are exposed to financial risks in the form of liquidity, credit and market price risks, as well as risks resulting from
pension obligations as well as tax risks. The following paragraphs provide details of financial risks.
Foreign Currency Risk
Foreign currency risks for the Bayer Group result from changes in exchange rates and the related changes in the value of
financial instruments (including receivables and payables) and of anticipated payment receipts and disbursements not in
the functional currency. These risks may result in decreased financial receivables and increased financial payables and
furthermore in diminished anticipated earnings.
Financial Risks associated with Pension Obligations
The Bayer Group has obligations to current and former employees related to pensions and other post-employment
benefits. Changes in relevant measurement parameters such as interest rates, mortality and salary increase rates may raise
the present value of our pension obligations. This may lead to increased costs for pension plans or diminish equity due to
actuarial losses being recognized as other comprehensive income in the statement of comprehensive income. A large
proportion of our pension and other post-employment benefit obligations is covered by plan assets including fixed-income
securities, shares, real estate and other investments. Declining or even negative returns on these investments may
adversely affect the future fair value of plan assets. Both of these effects may negatively impact the development of equity
and / or earnings and / or may necessitate additional payments by our company.
Tax Risk
Bayer AG and its subsidiaries operate worldwide and are thus subject to many different national tax laws and regulations.
Bayer Group companies are regularly audited by the tax authorities in various countries. Amendments to tax laws and
8

regulations, legal judgments and their interpretation by the tax authorities, and the findings of tax audits in these countries
may result in higher tax expense and payments, thus also influencing the level of tax receivables, tax liabilities and
deferred tax assets and liabilities. Significant acquisitions, divestments and restructuring programs and other
reorganizational measures undertaken by Bayer could also have an impact. We establish provisions for taxes, based on
estimates, for liabilities to the tax authorities of the respective countries that are uncertain as to their amount and the
probability of their occurrence. It cannot be ruled out that these provisions are insufficient to cover all the risks.
Credit Risk
Credit risks arise from the possibility that the value of receivables or other financial assets of the Bayer Group may be
impaired because counterparties cannot meet their payment or other performance obligations. These risks may result in
loss of financial assets including positive market values of derivative instruments.
Interest Rate Risk
Interest rate risks result for the Bayer Group through changes in capital market interest rates, which in turn could lead to
changes in the fair value of fixed-rate financial instruments and changes in interest payments in the case of floating-rate
instruments.
Commodity Price Risk
Commodity price risks for the Bayer Group result from the volatility of raw material prices, which can lead to an increase
in the prices we pay for seeds and energy.
Safety, Quality and Compliance Risks
Product Safety and Stewardship
Despite extensive studies prior to approval or registration, products may be partially or completely withdrawn from the
market due to the occurrence of unexpected side-effects or negative effects of our products, for example. Such a
withdrawal may be voluntary or result from legal or regulatory measures. In the agriculture business particularly, there is
an additional risk that our customers could use our products incorrectly. Furthermore, the presence of traces of unwanted
genetically modified organisms in agricultural products and / or foodstuffs may have wide-ranging negative repercussions.
External Partner Compliance
From the perspective of the Bayer Group as a whole, there is a risk that our partners, such as suppliers, do not give due
attention to our corporate values and ethical, compliance and sustainability requirements.
Health, Safety and Environment
Misconduct or noncompliance with legal requirements or Bayer Group standards, including those safeguarding the rights
to genetic resources, may result in personal injury, property, reputational or environmental damage, loss of production,
business interruptions and / or liability for compensation payments. This includes the risk of hazardous substances being
released due to an incident in production.
Intellectual Property
Our portfolio largely consists of patent-protected products. Generic manufacturers, in particular, attempt to contest patents
prior to their expiration. We are currently involved in legal proceedings to enforce patent protection for our products. On
the other hand, legal action by third parties for alleged infringement of patent or other property rights by Bayer may
impede or even halt the development or manufacturing of certain products. We may also be required to pay monetary
damages or royalties to third parties.
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