Apollo, KKR close €3B deal for stake in Bayer unit

Apollo ↘ 0.59% announced on Wednesday that its managed funds have closed a €3 billion capital solution for Bayer, completing a deal first announced on July 10 that gives the German life sciences company a financial cushion as it navigates bond maturities and ongoing litigation costs. KKR ↘ 1.43% joined the transaction as a minority participant, a detail not disclosed when the agreement was initially signed.manilatimes+1

The Deal

Under the transaction, Apollo and KKR invested equity capital into a newly established entity holding Bayer's long-acting reversible contraceptives business, which includes hormonal intrauterine products such as Mirena, Kyleena, and Jaydess/Skyla, as well as the subdermal implant Jadelle. Bayer retains a majority stake in the entity and full operational control, with the LARC activities remaining part of its Pharmaceuticals Division and fully consolidated in the company's financial statements.bayer+2

Apollo Partner Jamshid Ehsani called the deal a reflection of the firm's High Grade Capital Solutions platform, which provides "large, flexible, and bespoke capital to blue-chip corporations." He added that Apollo has committed to deploying more than $100 billion in Germany over the coming decade.manilatimes

Why Bayer Sought the Capital

When the agreement was signed in July, Bayer CFO Dr. Judith Hartmann described it as "a strategic financing solution that strengthens our capital structure while preserving full operational control over this core pharmaceuticals business." She cited a need for enhanced financial flexibility to manage "increased liquidity requirements this year related to bond maturities and litigation procedures".reuters+1

Bayer has faced years of legal exposure stemming from its 2018 acquisition of Monsanto, particularly lawsuits related to the Roundup weedkiller. The LARC deal allows the company to raise capital without relinquishing control of a profitable business line.

Advisors

Centerview Partners served as financial advisor to the Apollo funds, with Latham & Watkins, Paul Weiss, and NautaDutilh acting as legal counsel. Bayer was advised by BofA Securities and Deutsche Bank ↘ 3.27% as financial advisors and Linklaters as legal counsel.securities+1