Leverkusen, Germany -- An independent MaterialScience business will have better access to capital and greater flexibility, said Bayer as it gave more details of its plans to float MaterialScience to concentrate on pharma and agrochemicals.
Bayer said in a statement that its supervisory board "unanimously approved" the management board's decision to float the MaterialScience business in 12 to 18 months.
Bayer said that the floatation will benefit the MaterialScience business which faced being starved of investment as large amounts of money would be needed to successfully fund the more profitable pharma business in the future.
As a separate company, MaterialScience can align its organisational and process structures and corporate culture toward its own industrial environment and business model, said Bayer.
Additionally, the separation gives MaterialScience the opportunity to be more flexible in the face of global competition
"We firmly believe that MaterialScience will use its separate status to deploy its existing strength even more rapidly, effectively and flexibly in the global competitive arena," Marijn Dekkers, chairman of the management board of Bayer, said.
He added that the separate MaterialScience business would be able to align its strategy and corporate culture to technological and cost leadership. It will have greater freedom to make investment and portfolio decisions.
Dekkers added "We have steadily invested in facilities, even in difficult economic times." Bayer invested over EUR 3.8 bn in property, plant and equipment and research and development for the MaterialScience business between 2009 and 2013. He pointed to world-scale production facilities in Shanghai, China and the new TDI plant in Dormagen, Germany, which is to be officially inaugurated in December.
Following the intended flotation, MaterialScience will be Europe's fourth-largest chemical company; it had pro forma global sales in 2013 of more than EUR 11bn. 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 and be headquartered in Leverkusen, said Bayer.
