Bayer to fund $66-bn Monsabto deal from Covestro-stake sale

German drugmaker Bayer AG yesterday sold 22 million or 10.9 per cent of its shares in its chemicals subsidiary Covestro for €1.46 billion ($1.5 billion) in order to raise funds for its takeover of seeds maker Monsanto.

Bayer sold the shares to institutional investors for €66.50 per share, and the deal is expected to close today.

Post sale, Bayer will continue to hold a majority 53.3 per cent in Covestro - a 2015 spinout of formerly Bayer's $12.3-billion materials science division.

''The successful placement of a large block of Covestro shares underscores capital market's confidence in this still young company,'' said Johannes Dietsch, CFO of Bayer. The company intends to use the proceeds of nearly €1.5 billion to pay down debt.''

Bayer is raising money through debt and equity financing for its $66-billion proposed all-cash acquisition of Monsanto.

The Leverkusen, Germany-based giant has already placed €4 billion in mandatory convertible notes in November, as part of its plan to raise $19 billion of fresh equity capital.