Pharmaceutical giant Bayer (BAYRY)  said today that it is cutting its holding in Covestro, a Bayer spin-off and high-tech polymer supplier, through an accelerated book building process with a targeted volume of 1 billion euros.

The move comes in conjunction with the German-based firm's acquisition of U.S. agrochemical firm Monsanto (MON)

Last year, Bayer agreed to buy Monsanto for $66 billion. It has said it planned to finance the deal by raising $19 billion in new equity and $38 billion of debt. It also secured $57 billion in bridge financing from five banks.

Bayer is offering 1 billion euros of bonds exchangeable into Covestro shares maturing in 2020. Barclays (BCS) and Morgan Stanley (MS)  will be acting as joint book runners.

In the context of the placements, Bayer has agreed to a lock-up period of 90 days.

The decisions announced today will allow Bayer to further reduce its stake in Covestro, as it aims to achieve a full separation in the medium term.

Shares of Bayer were lower during midday trading on Tuesday.

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