Bayer sells €3 billion contraceptives stake to Apollo in capital boost

Bayer AG sold a minority stake in its long-acting reversible contraceptives business to Apollo Global Management for €3 billion ($3.4 billion), using the proceeds to strengthen its balance sheet.

"This transaction is a strategic financing solution that strengthens our balance sheet and enhances financial flexibility as we manage increased liquidity requirements this year related to bond maturities and litigation procedures," Chief Financial Officer Judith Hartmann said.

Apollo-managed funds will take a minority, non-controlling stake in a new entity holding the LARC business, while Bayer retains a majority stake and complete operational control. The business will remain part of the pharmaceuticals division's core operations and stay fully consolidated in group accounts, Bayer said.

The deal is expected to close in the third quarter of 2026, subject to antitrust approval and customary conditions. The €3 billion infusion helps Bayer manage increased liquidity requirements this year related to bond maturities and litigation procedures.

Bayer has faced persistent legal costs tied to Roundup weedkiller litigation, with more than 100,000 claims outstanding. The company has set aside $16 billion to resolve those cases. The Apollo deal provides a capital injection without Bayer surrendering control of a core pharma asset, a structure that preserves the unit's revenue contribution to the group.

The transaction values the LARC business at an implied multiple that reflects the steady cash flows from long-acting contraceptive products, which generate recurring prescription revenue. For Apollo, the deal adds a healthcare asset with predictable demand characteristics to its credit and private equity portfolio.

The partnership may open the door to further asset-level deals at Bayer, which has signaled willingness to explore minority stake sales in business units to reduce debt. Investors will watch for additional transactions as the company addresses its roughly €38 billion in net debt.

The deal also marks one of the largest private equity investments in a European pharma asset this year, signaling continued appetite from alternative asset managers for minority stakes in drugmakers' established product lines. Apollo joins a growing list of buyout firms deploying capital into life sciences assets through structured minority investments rather than full takeovers.

This article is for informational purposes only and does not constitute investment advice.