Bayer to raise 26b euros in share, bond sales for Monsanto

[LONDON] Bayer AG is planning to raise as much as 26 billion euros (S$40.55 billion) in shares and bonds to help fund its US$66 billion purchase of Monsanto Co, after a sign-off last week by US authorities capped almost two years of antitrust review.

Bayer will raise 6 billion euros in a rights offering and 20 billion euros from bond sales, the Leverkusen, Germany-based company said in a statement on Sunday. Existing shareholders will be able to buy two new shares for every 23 held at a price of 81 euros, Bayer said. That's a discount of about 22 per cent to Bayer's June 1 closing price.

"It is a significant component of the financing for the acquisition of Monsanto and the final equity measure associated with this undertaking," chief executive officer Werner Baumann said in the statement.

The financing is one of the final puzzle pieces as Bayer gets close to completing the Monsanto deal, an acquisition that will place the German conglomerate atop the global seeds and crop chemicals market. It's also the latest step in a corporate transformation, as the inventor of Aspirin shed its plastics business and remade itself as a life-science company with equally sized health and agriculture units.

Bayer's purchase of Monsanto will formally close June 7, the Frankfurter Allgemeine Zeiting reported. Approval from antitrust authorities in Mexico is the only remaining hurdle to the deal, the German newspaper said.

The agreement with the US Justice Department requires the sale of assets to BASF SE that Bayer has previously announced. The divestiture package is worth about US$9 billion, the largest in a US merger-enforcement case, the government said.

The offering has been underwritten by a group of 20 banks. Joint global coordinators are Bank of America Merrill Lynch and Credit Suisse. Bayer raised a US$56.9 billion loan in October 2016 to support the acquisition, the company said at the time.

BLOOMBERG