Bayer sells $3.4B stake in contraceptives unit to Apollo

Apollo Global Management is paying $3.4 billion for a minority stake in Bayer's long-acting reversible contraceptives business, giving the German drugmaker capital to address bond maturities and litigation costs.

Bayer said Friday it had secured €3 billion ($3.4 billion) in equity from Apollo-managed funds in a deal tied to its long-acting reversible contraceptives, or LARC, business. Apollo funds and affiliates will take a minority, non-controlling stake in a newly formed entity holding the LARC business, while Bayer retains a majority stake and "complete operational control."

"This transaction is a strategic financing solution that will strengthen our balance sheet and enhance financial flexibility," said Judith Hartmann, chief financial officer at Bayer, in a statement. The company faces "increased liquidity requirements this year related to bond maturities and litigation procedures," she said.

The LARC business will remain part of Bayer's pharmaceuticals division core operations and stay fully consolidated in group accounts, the company said. The deal is expected to close in the third quarter of 2026, subject to antitrust approval and customary conditions.

Bayer has been under financial pressure from litigation tied to its Roundup weedkiller, which has generated more than 165,000 claims. The company has set aside roughly $16 billion to resolve glyphosate-related lawsuits, though some cases remain unresolved. The company's net debt stood at €34.4 billion at the end of 2025, according to its annual report.

The transaction marks one of the largest private equity investments in a pharmaceutical asset this year, signaling institutional investor appetite for cash-generating healthcare businesses with established market positions. Bayer's LARC portfolio includes intrauterine devices and contraceptive implants that generate recurring revenue streams.

Apollo, which manages more than $700 billion in assets, has been expanding its healthcare investment footprint. The firm previously invested in life sciences and health services companies, including a $2.5 billion partnership with Athene in healthcare real estate.

For Bayer, the deal provides a capital infusion without relinquishing control of a core business line — a structure that may serve as a template for other pharmaceutical companies seeking to monetize assets while maintaining operational ownership. The company said proceeds will be used to address near-term debt obligations and support ongoing operations.

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