German plastics and chemicals group Covestro (1COV.DE) pledged it would return cash to shareholders if it cannot find a suitable major takeover target within two years as it eyes 5 billion euros (£4.39 billion) in total operating cash flow after investments over the next five years.
“We have no reason to hoard liquidity if no significant external investment opportunity arises. We intend to return excess cash to our shareholders after 24 months without significant M&A activity,” Chief Executive Patrick Thomas said in a statement on Thursday, citing share buybacks or special dividends as options.
The maker of chemicals for blu-ray discs and insulation foams is banking on better usage rates at its large chemical sites, which parent Bayer (BAYGn.DE) has kept in shape over recent years and which do not require considerable upgrades.