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Bayer Asset Stripping

Bye-Bye, Polymers: Bayer to Divest Material Science Business

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"Bayer will continue as an enterprise with an attractive and balanced portfolio and a primary focus on organic growth," Dekkers explained. To this end, the company intends to raise its research and development spending, selectively strengthen early research at the interface between HealthCare and CropScience, and continue driving the successful commercialization of the recently launched pharmaceutical products. Bayer expects these products to have a combined peak annual sales potential of at least € 7.5 billion.

Second Divestiture of Materials Business in Ten Years

"We firmly believe that Material Science will use its separate status to deploy its existing strength even more rapidly, effectively and flexibly in the global competitive arena," Dekkers commented. A strategy and corporate culture aligned to technological and cost leadership, coupled with the ability to make its own investment and portfolio decisions, would give Material Science the best development prospects in a highly competitive market, Dekkers stated. It is the second time that Bayer stripps down its portfolio, divesting especially materials and specialities: By the beginning of the century, the ten crisis-ridden firm bundled most of these activities in the newly formed company Lanxess (started in 2004). This former Bayer business is currently fallen on hard times itself and has to reduce busineeses and positions.

A New Entry in Europe's Chemical Top–Five

"Material Science is a very well positioned business that today operates very modern, competitive, large-scale facilities. We have steadily invested in these facilities, even in difficult economic times," Dekkers pointed out, citing the world-scale production facilities in Shanghai, China, and the new TDI plant in Dormagen, Germany, which is to be officially inaugurated in December. Between 2009 and 2013 alone, Bayer invested a total of over EUR 3.8 billion in property, plant and equipment and research and development for the Material Science business.

Following the intended flotation, the former Bayer Material Science will be Europe's fourth-largest chemical company; it had global sales in 2013 of more than EUR 11 billion (pro forma figure). The new company is planned to have a global workforce of roughly 16,800, including about 6,500 in Germany. It will have a new name and a separate identity, but remain headquartered in Leverkusen.

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