Bayer Asset Stripping Bye-Bye, Polymers: Bayer to Divest Material Science Business
Chemicals giant Bayer plans to get rid of the remaining material science and polymers business: The company wants to focus on life science solutions, bringing its subsidiary Bayer material Science on the stock market by 2016. Already in 2004, the company had divested large parts of its speciality chemicals and polymer business into the new formed Lanxess.
Leverkusen/Germany – After the Wall Street Journal discussed the possibility of Bayer divesting its polymers business Bayer material Science, the German based company confirms the rumours: The company intends to focus on its life science businesses - Health Care and Crop Science – from 2016 on, the Bayer board stated.
In 2013, Bayer Material Science contributed € 11.2 billion to Bayer's € 40 billion turnovers. The split–off could be Germany's biggest stock market launch in recent times, market insiders believe. Only ten years ago, the company had divested big parts of its polymers and specialities business into the newly found Lanxess.
"Our intention is to create two top global corporations: Bayer as a world-class innovation company in the Life Science businesses, and Material Science as a leading player in polymers," Bayer CEO Dr. Marijn Dekkers announced. He said both companies have excellent prospects for success in their respective industries. Employment levels are expected to remain stable over the next few years, both globally and in Germany.
Future Bayer Focus on Agrochemicals and Life Sciences
In recent years, Bayer's center of gravity has greatly shifted toward its Life Science activities, the company states. Recently, it had sucesfully launched new pharmaceutical products and announced interests to buy Merck & Co's over-the-counter products business in the US. Following its regular evaluation of the business portfolio, the Board of Management has therefore decided to focus the company on these areas. The Life Sciences currently already account for about 70 percent of Bayer's sales and 88 percent of EBITDA before special items.
Stock Market Launch by 2016
It is planned to float the Material Science business on the stock market as a separate company within the next 12 to 18 months. A major reason for this move is to give Material Science direct access to capital for its future development. This access can no longer be adequately ensured within the Bayer Group due to the substantial investment needs of the Life Science businesses for both organic and external growth, the firm believes.
The companies of the future Bayer Group had pro forma sales of approx. € 29 billion in 2013 and will employ nearly 99,000 people, including about 29,500 in Germany. Corporate headquarters will remain in Leverkusen.
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