Bayer Shareholders Approve Lanxess Spin Off Plan

Leverkusen, Germany, November 30–At an extraordinary general meeting on Wednesday, the majority of shareholders in Bayer, the German chemicals and pharmaceuticals company, voted in favour of a spin-off of Lanxess, the subsidiary in which the company has bundled most of its business with chemicals and around a third of its activities involving polymers.

Shareholders in Bayer will receive one share in Lanxess for every ten shares in Bayer. The reason for the spin-off is that Bayer wishes to concentrate on its CropScience, MaterialScience and Health Care divisions. Most of the business that has been bundled in Lanxess is cyclical and achieves only a low yield.

Lanxess is to go public at the beginning of 2005; Bayer believes that it will fulfil the criteria for a listing on the midcaps index (MDax). The subsidiary is expected to undergo extensive restructuring in order to improve its profit-earning capacity. Bayer itself is aiming to increase its sales return to 22 per cent by 2006, compared with 12 per cent last year.