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.
