Bayer opts to spin off Lanxess to shareholders

By Patrick Raleigh, ERJ On-line news editor

Leverkusen, Germany-Bayer AG has decided to separate off its Lanxess subsidiary via a spin off to its own shareholders rather than an initial public offering (IPO)-its other stated option for the chemicals, rubber and plastics unit.

The spin off, which will see Lanxess listed separately on the Frankfurt stock exchange at the start of 2005 is subject to approval of an Extraordinary Stockholders' Meeting in mid-November, said Bayer. The group added that it will give full details the spin-off in the notice of the meeting.

“In the current stock market climate, a spin-off to Bayer stockholders is the best route to a listing for Lanxess. That way the present owners of Bayer's assets automatically remain the owners of the assets being transferred to Lanxess,” explained Werner Wenning, Bayer CEO in a 16 July press statement.

Germany's capital markets have shown little appetite for IPOs this year, as evidenced by a recent offering by Deutsche Post AG, which raised just half its target funds.

Lanxess' business is developing according to plan, according to Wenning. The Euro6000-million turnover unit has been operating independently from Bayer since 1 July.