Bayer intends in the future to focus entirely on its Life Science businesses – HealthCare and CropScience – and float its MaterialScience business on the stock market as a separate company.
The spin-off will help Bayer 'position itself as a world-leading company in the field of human, animal and plant health', the German company said.
Bayer said a major reason for this move is 'to give MaterialScience direct access to capital for its future development'.
Also, as a separate company, MaterialScience can align its organisational structure and corporate culture entirely towards its own industrial environment and business model, the company said.
'Our intention is to create two top global corporations: Bayer as a world-class innovation company in the Life Science businesses, and MaterialScience as a leading player in polymers,' said Bayer CEO Marijn Dekkers.
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.
Our intention is to create two top global corporations
In recent years Bayer's focus has shifted towards its Life Science activities with the launch of pharmaceutical products, the pending acquisition of the over-the-counter products business of Merck & Co in the US, and the successful development of the CropScience business.
The aim is to continue these positive developments in the future through further investment in growth, the company said. LifeScience currently accounts for about 70% of Bayer's sales and 88% of EBITDA.
Bayer plans to float the MaterialScience business on the stock market as a separate company within the next 12–18 months.
The companies of the future Bayer Group had pro forma sales of approximately €29bn in 2013. They will employ nearly 99,000 people, including about 29,500 in Germany. Corporate headquarters will remain in Leverkusen.
'Bayer will continue as an enterprise with an attractive and balanced portfolio and a primary focus on organic growth,' added Dekkers.
To this end, the company will increase its spending on R&D, selectively strengthen early research at the interface between HealthCare and CropScience, and continue driving the commercialisation of the recently launched pharmaceutical products. Bayer expects these products – the anticoagulant Xarelto, the eye medicine Eylea, the cancer drugs Stivarga and Xofigo, and the pulmonary hypertension drug Adempas – to have a combined annual sales potential of at least €7.5bn.
Following the intended flotation, MaterialScience will be Europe's fourth-largest chemical company; it had global sales in 2013 of more than €11bn. The new company will have a global workforce of roughly 16,800, including about 6,500 in Germany. It will also have a new name and a separate identity and, like Bayer, will be headquartered in Leverkusen.
