Bayer to split group into four units
6 Dec 2001
Bayer plans to transform its current organisational structure into a management holding company with independent operating subsidiaries in a bid to give the company greater flexibility to form strategic co-operations.
Subject to stockholders' approval, the new structure is to be operational by January 1, 2003. The company's Supervisory Board at its meeting today approved plans to this effect.
Following the decision made in September to transfer the Health Care segment and the Crop Protection Business Group into legally independent corporate units within the Bayer Group, the same action is now to be taken for the Polymers and Chemicals business segments as well.
Merging Bayer's Rubber, Plastics, Polyurethanes, as well as Coatings and Colorants business groups will reportedly create one of the world's largest polymers companies, with sales of more than EUR 11 billion.
The new company will capitalise on major synergies through shared technological structures - especially in manufacturing, logistics and marketing - and a common IT platform.
With customer industries increasingly requiring single-source suppliers and service back-up, the new company's operations will be aligned toward markets and customer industries - such as automotive, electrical/electronics and construction - with the aim of opening up further business opportunities.
Bayer's Basic and Fine Chemicals as well as Speciality Products business groups will also be merged to create an independent corporate unit. With some EUR 4 billion in sales and a targeted return of 12 to 13 percent, the new company will be one of the world's leading speciality chemicals producers.
As part of this restructuring, Bayer plans to divest non-core businesses: the wholly owned subsidiary Haarmann & Reimer of Holzminden, Germany, a manufacturer of fragrances and flavours, and Rhein Chemie Rheinau of Mannheim, Germany, a specialist in additives for the rubber, lubricants and plastics industries as well as in polyurethane chemistry.
Bayer also plans to sell its 50 percent interest in PolymerLatex GmbH & Co. KG of Marl, Germany. Since Degussa, the other joint venture partner, also wishes to sell its interest, the sale will be effected jointly by Bayer and Degussa.
Essential corporate services not directly assigned to the operating companies will be merged into service companies for the benefit of the entire Bayer Group.
