LEVERKUSEN, Germany (Oct. 6)—Bayer A.G.'s plan to spin off its Lanxess A.G. chemical and polymers business into a separate entity will start with Bayer shareholders receiving one share in the new company for every 10 they hold in the parent firm, according to a Bayer statement.
In a related move, Bayer has purchased a $230 million mandatory convertible bond issued by Lanxess, to bolster the financial condition and credit rating of the new firm.
Lanxess incorporates most of the chemical activities and about a third of the polymers operations of the former Bayer Group of companiesùnot including its polyurethanes business, which remains with the Bayer MaterialScience unit within Bayer.
The financial proposal will be discussed and voted on at an extraordinary stockholders' meeting Nov. 17 in Essen, Germany. If the shareholders approve the plan by a majority of at least 75 percent of the capital stock represented, Lanxess will be listed on the stock market at the beginning of 2005, Bayer said.
Bayer reiterated its goal is to divest Lanxess wholly through the planned spinoff, with neither company holding shares of the other immediately following the spinoff.