German drugs and chemicals group Bayer said it planned to sell unit H.C. Starck to a consortium formed by Advent International and the Carlyle Group for 700 million euros ($908 million) plus debt.
Bayer said in a statement on Thursday the sale of one of its chemicals businesses, including debt of about 450 million euros, would help pay for its 17 billion euro acquisition of rival Schering .
The company aims to create a healthcare group with sales of around 15 billion euros with the Schering acquisition, enabling the merged entity to compete better with big global drugmakers.
Shares in Bayer were up 0.6 percent at 39.98 euros by 1448 GMT, outperforming a flat German blue-chip DAX .
"Bayer has fetched a good and fair price for the business," said Silke Stegemann, an analyst at Landesbank Rheinland-Pfalz.
Bayer said the Starck sale, which is expected to close early next year, would cut its net debt by about 1 billion euros and lead to a book gain of 150 million euros. Bayer's net debt stood at 19.95 billion euros at the end of June.
The Starck unit, which makes powders of metals such as molybdenum, tungsten and tantalum as well as ceramic powders, had sales of 920 million euros in 2005, up from 703 million euros a year earlier.
Bayer, which announced the planned sale in March this year, said the buyers intended to continue developing Starck with the aim of positioning the company for a stock market listing in three to five years.
A German newspaper reported last month that Bayer had received three bids for Starck. They were from Advent and Carlyle in a team, Belgian metals maker Umicore and financial investor Bain Capital.
Bayer has also sold its diagnostics business to engineering conglomerate Siemens for 4.2 billion euros to help pay for Schering.
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