Amid restructuring efforts, Bayer has addressed its need for a capital infusion in pharma under a deal to secure 3 billion euros ($3.4 billion) in equity from New York City asset manager Apollo, surrendering a minority, non-controlling stake in its newly established long-acting reversible contraceptives (LARC) business.
The German company will retain its majority stake and full operational control of the LARC business with no adjustment in its strategy, Bayer said, adding that LARC will remain fully consolidated in its financial statements.
The partnership is “a strategic financing solution that strengthens our capital structure,” Bayer chief financial officer Judith Hartmann said in a release Friday.
“It enhances our financial flexibility as we manage increased liquidity requirements this year related to bond maturities and litigation procedures, while continuing to execute our long-term priorities,” Hartmann added.
The companies expect to close the transaction in the third quarter.
Bayer has been financially strapped since its ill-fated, $66 billion acquisition of Monsanto in 2016, which brought with it pricey Roundup litigation.
A recent U.S. Supreme Court decision, however, has blunted thousands of state-level lawsuits and given the company hope that it can gain approval of a $7.25 billion settlement to resolve class-action injury claims of those who say long-term use of Roundup weed killer caused their non-Hodgkin lymphoma.
As for Bayer's pharma and consumer health divisions since the acquisition, combined revenues have been stagnant, from 2016 when they came in at 24 billion euros ($25.3 billion) to last year when they reached 23.6 billion euros ($26.7 billion).
Bayer’s LARC unit includes products such as Mirena, Kyleena and Jaydess. The contraceptive products reached combined sales (PDF) of 1.37 billion euros ($1.55 billion) last year, up 8% over 2024. In the first quarter of this year, sales dropped (PDF) 10% to 316 million euros ($361 million).
“This transaction reflects the core purpose of Apollo's High Grade Capital Solutions platform—providing large, flexible, and bespoke capital to blue-chip corporations—enabling Bayer to strengthen its balance sheet while retaining full operational control over a core business,” Apollo partner Jamshid Ehsani said in a statement.
Editor's note: In May, Fierce Pharma parent company Questex announced a definitive agreement to be acquired by funds managed by Apollo. The transaction is pending.