Leverkusen, Germany – Bayer is reportedly mulling a plan to sell its plastics business to focus on its health and agrichems businesss.
News agency Bloomberg quotes unnamed sources which it said had knowledge of the matter and who said Bayer was “exploring the sale” of its MaterialScience business. The division reported sales of EUR11.2bn in 2013, a 2.2% reduction on the EUR11.5bn worth of sales made in 2012, as reported by Utech-polyurethane.com at the time.
The reports came as the company announced a 79% rise in the MaterialScience division's adjusted core profits for the first quarter of 2014 compared to Q1 2013 and as Bloomberg analysts estimated the business' worth at EUR7.5bn ($10.4bn). The company's most recent annual EBIT - reported as EUR435m in 2013 was however, 25% lower than the figure in 2012, when it was reported as EUR581m.
Sales in the polyurethanes business improved by 6.5% to EUR1.5bn in Q1 2014, compared to EUR1.4bn in Q1 2013 according to the report’s exchange rate and portfolio adjusted figures. Chief executive officer Marijn Dekkers said there had been higher sales volumes in nearly all regions - especially North America and Asia/Pacific, he said.
Dekkers said the increase was largely due to lower raw material prices but earnings were boosted by higher volumes and efficiency improvement measures. Lower selling prices, however, had a negative effect, he said.
Total group sales for the quarter rose 2.8% to EUR10.6bn, said the Bayer report.
According to news reports, insiders said the disposal would be a prolonged affair. They added that its is likely that it would coincide with Bayer buying businesses in the drug and life sciences area.
A Bloomberg report said Germany-based Evonik Industries had “showed potential interest” in the business several months ago but the deal did not materialise.
For 2014, Dekkers said Bayer was planning to see an adjusted group sales growth of about 5%.
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