Singapore’s Temasek buys 3.6% Bayer stake in $3.7b transaction

FILE PHOTO - A Temasek logo is seen at the annual Temasek Review in Singapore July 7, 2016. REUTERS/Edgar Su

German drugmaker Bayer is raising 3 billion euros ($3.7 billion) towards its planned $62.5 billion takeover of seed maker Monsanto by selling a 3.6 percent stake to Singapore’s state investment company Temasek.

Bayer said it had struck a deal with Temasek under which it would issue shares with an entitlement to dividends as of January 1, 2017 at an at-market price.

Together with its existing holding in Bayer, Temasek would own about 4 percent in Bayer after the transaction.

“Temasek takes equity positions in leading companies globally and is a long-term investor,” Bayer Chief Executive Werner Baumann said in a statement.

“This investment affirms our business strategy including the proposed acquisition of Monsanto, as well as Bayer’s strong growth prospects.”

Bayer added that the proceeds from the placement would be taken into account when setting the size of the previously announced rights issue to fund the Monsanto takeover.

Bernstein analysts earlier this months put the expected rights issue at 7-9 billion euros in volume, while brokerage Baader Helvea estimated it to be worth 4-6.5 billion euros, meaning Temasek is footing a sizable part of the bill.

A company spokesman said Bayer had not yet decided when to carry out the rights issue.

It has previously said it would go ahead with the transaction once it has sufficient certainty on the antitrust clearance.

Bayer last week unveiled plans to sell its digital farming business to BASF in what a source familiar with the matter said was part of an outline deal with the U.S. Justice Department (DoJ) to secure antitrust approval.

It already has the conditional go-ahead from European regulators.

Bayer did not give a per-share price but at 31 million new shares created for Temasek, that would amount to 96.77 euros each. Bayer shares closed 0.7 percent lower at 97.98 euros on Monday ahead of the announcement.

The head of Temasek Europe told a German paper in August that the sovereign wealth fund wanted to make acquisitions in Germany, citing agriculture, pharma and biotech as target industries, among other sectors.

The fund is being advised by Michael Diekmann, former CEO of insurer Allianz, and Franz Fehrenbach, supervisory board chairman at Bosch.

Temasek was not planning to take an overly proactive role, instead aiming for minority stakes and leaving business to management, Lee was quoted as saying at the time.

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Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.