The Cincinnati Enquirer
and Bloomberg News
Germany's Bayer AG said Friday it will spin off its chemicals and part of its plastics businesses, including its plant on River Road in Addyston.
Bayer said the new company, which will have 20,000 employees and $6 bllion in sales, will be sold to existing shareholders or in a public stock offering by early 2005.
The Addyston plant, acquired from Monsanto in late 1995, employs 450 and makes a variety of durable plastics used in autos, appliances, medical products and other items.
In a cost-cutting move two years ago, Bayer eliminated about 200 jobs at the Addyston plant, which since 1961 has produced acrylonitrile-butadiene-styrene (ABS), a resin used to make durable plastic parts.
Bayer said the spinoff will allow it to focus on its more profitable health-care and crop pesticides businesses.
The move will mean Bayer's research and investment budget is no longer stretched across four diverse areas.
"We will use our resources to focus more strongly on health care, agriculture and materials sciences," Bayer chief executive officer Werner Wenning said in a conference call. "Here we have excellent technologies and market growth."
The new company, dubbed NewCo, will be headed by Axel Claus Heitmann, 44, who now runs Bayer Polymers' Asian operations.
The separation would reduce Bayer's sales to $19 billion, from about $25.2 billion in 2002, and would mean the company will cut about 1,000 fewer jobs than it had planned.
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