Market Volatility

IPO Pipeline Intact — For Now

Bayer Material Science Covestro filter for the production of raw materials for cosmetics high-purity polyurethanes chemicals Source Bayer 48312615
Work at Bayer's chemicals unit Covestro continues, IPO or not.
  • Why it matters

    Why it matters

    Worries about China’s economic outlook have sent global stock markets tumbling and could thwart plans to list companies, including Bayer’s chemicals operations, Hapag-Lloyd and Scout24.

  • Facts


    • Bayer’s plastics operations Covestro, property groups Aurelis and BGP, shipping firm Hapag-Lloyd and digital classifieds firm Scout24 are among the current German IPO candidates.
    • German initial public offerings for which preparations are at an advanced stage are unlikely to be postponed at this stage, bankers said.
    • Non-cyclical and real estate companies in the IPO pipeline have a better chance of being floated on schedule than export-dependent firms such as shipping line Hapag-Llyod, bankers said.
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Big stock market flotations are like supertankers – rough seas don’t throw them off course. Take First Data, the U.S. payments processor, bought by private equity firm KKR eight years ago for close to $30 billion. Despite the current roller coaster on global markets, the company went ahead this week with preparations for its initial public offering by announcing the banks that will manage the sale planned for this year.

The flotation is being closely watched in Germany, where it’s seen as a bellwether for a number of German IPO candidates. These include the plastics and adhesive division of pharmaceutical giant Bayer, which will be renamed Covestro and whose flotation is expected to raise at least €2.5 billion, or $2.85 billion. Preparations are still underway regardless of the shock caused by the tumbling Chinese market.

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