Bayer launched $7bn rights issue to finance Monsanto takeover

Bayer has launched a 6 billion euros ($7bn) rights issue, a cornerstone of the financing package for its planned $62.5bn takeover of Monsanto.
 

The cash call is smaller than initially envisaged by Bayer because Monsanto reduced its debt while the antitrust review dragged on.
 

Also, Bayer raised 4.5bn euros more from selling down its stake in plastics maker Covestro than initially expected.
 

Bayer also grossed 7.6bn euros in proceeds from selling assets to BASF, as the antitrust reviews were stricter than anticipated, but that did not cut the need to raise money via a share issue because future cash flows to service debts would also be lower.
 

When the merger was agreed in September 2016, Bayer said it would raise $19bn worth of fresh equity capital for the takeover deal, parts of which was covered by issuing 4bn euros in mandatory convertible notes in November 2016.
 

Bayer closed the transaction on June 7.
 

Bayer will create an agricultural supplies giant with sales of about 20bn euros, based on 2017 figures, when taking into account the divestments.
 

At current foreign exchange rates, that compares to about 12.4bn euros at DowDuPont’s Corteva Agriscience unit, 11bn euros at ChemChina’s Syngenta and 7.9bn at BASF, including businesses to be acquired.