It’s finally going to happen. Following years of speculation by industry experts and clamoring from investors, German pharmaceutical giant Bayer is now committed to spinning off its plastics subsidiary, Bayer MaterialScience. The marketplace rewarded Bayer with a 5 percent increase in its share price.
With the announcement of plans to list BMS, the Bayer chief executive Marijn Dekkers has taken the Leverkusen-based firm another giant step forward almost 10 years after it spun off its chemicals subsidiary, Lanxess.
As if moving in slow motion, Bayer is catching up with what other firms, including Hoechst and Imperial Chemical Industries, achieved in the 1990s. This kind of restructuring is unpopular in executive offices, something that is understandable considering how much of the company’s lifeblood and tradition is at play.
But industrial logic has made the separation of the plastics segment and the healthcare business a sensible decision. Business models and success measurements have changed greatly over the decades and most conglomerates have chosen to separate their pharmaceutical businesses from other operations. Bayer and Merck have been notable exceptions.