German pharmaceutical company Bayer has received a fresh shot in the arm in its US$62.5 billion bid to take over agrochemical company Monsanto. Singapore’s state-owned investment firm Temasek Holdings Pte has revealed that it will be buying about 31 million Bayer shares in a deal worth €3 billion (US$3.7 billion). The purchase will raise Temasek’s stake in Bayer by 3.6 percent, up to 4 percent from the previous 0.4 percent. According to reports about the deal, Bayer will issue shares to Temasek with an entitlement to dividends as of January 1, 2017, at an at-market price.
In a statement after the deal’s announcement, Werner Baumann, CEO of Bayer, said, “Temasek takes equity positions in leading companies globally and is a long-term investor...This investment affirms our business strategy including the proposed acquisition of Monsanto, as well as Bayer’s strong growth prospects.” Bayer’s bid for Monsanto received fresh support last week after reports surfaced that the United States Department of Justice had given the go-ahead to the merger, removing the last hurdle to the successful completion of the biggest deal in the history of the pharmaceutical industry.
According to Bloomberg, the combined firm after the deal “would be a one-stop shop for farmers, selling a comprehensive array of fertilizers and seeds to be used in conjunction with big data applications”.
This is also the latest in a string of investments by Temasek. Tan Chong Lee, head of Temasek Europe, told German newspaper Welt am Sonntag last August that the company is seeking investment opportunities in Germany and has looked at companies in Berlin and Munich, including in the consumer, technology, agricultural, biotechnology,- and pharmaceutical sectors. Tan also said at the time that Temasek was only looking at acquiring minority stakes, instead of taking proactive roles in management.
Temasek most recently made headlines for its investment into Turkish company Dogus Restaurant Entertainment and Management (D.ream), valued at US$1.2 billion, and known for owning Nusr-Et steakhouse, famous for the internet’s #SaltBae meme. A Reuters report stated that Temasek and Metric Capital paid US$200 million for a 17 percent holding in D.ream. Last year, Temasek also invested into Creative Artists Agency (CAA), a global entertainment and sports agency, and led a US$502 million Series D funding round for AR company Magic Leap along with other investors such as EDBI, the investment arm of the Singapore Economic Development Board.
Bayer did not reveal a per-share price for the Temasek deal, but as per calculations by Reuters, a €3 billion price for 31 million shares would mean a cost of about €96.77 per share. Bayer has planned a rights issue in the near-future to fund the Monsanto deal and clarified that the proceeds from Temasek would be taken into account when deciding the size of the rights issue. A company spokesman told Channel News Asia that Bayer had not yet decided the date for the rights issue – the company has previously said that it would go ahead only once it had sufficient certainty about receiving the antitrust clearance from the DoJ.