Dear colleagues,
Today we announced plans which will see the Bayer Group focus on the Life Science businesses of HealthCare and CropScience and float the MaterialScience subgroup on the stock market as a separate company. At its meeting today the Supervisory Board approved these plans.
I am aware that there has been repeated speculation about such a move for many years. I am equally aware that many of you will view the planned changes within the company emotionally and possibly also with some anxiety for the future. For this reason, I consider it very important that I personally explain why the Management Board has now decided to pursue this strategic realignment.
In recent years, Bayer's center of gravity has greatly shifted toward its Life Science activities with the successful launch of novel pharmaceutical products, the pending acquisition of the over-the-counter products business of Merck & Co., Inc., and the very successful development of the CropScience business. The Life Sciences currently account for about 70 percent of Bayer's sales and 88 percent of EBITDA before special items. The aim is to continue the positive development of these activities in the future through further investment in growth.
Following our regular evaluation of the business portfolio, I and my colleagues on the Board of Management therefore propose to focus the company on these areas. We are confident that separating the Life Science activities from MaterialScience at this time will create excellent conditions for these businesses to autonomously shape their respective futures to best reflect their own needs. The move will create two leading global corporations: Bayer as a world-class innovation company in the Life Science businesses, and MaterialScience as a leading player in polymers.
What does this mean specifically? The aim is to float the MaterialScience business on the stock market as a separate stock corporation within the next 12 to 18 months. It will have a new name and a separate identity and continue to be headquartered in Leverkusen. We firmly believe that MaterialScience will use its separate status to deploy its existing strength even more rapidly, effectively and flexibly in the global competitive arena.
MaterialScience is already a very well-positioned business that operates very modern, competitive, large-scale facilities. Its strategy and corporate culture aligned to technological and cost leadership, coupled with the ability to make its own investment and portfolio decisions, give MaterialScience the best development prospects in a highly competitive market. Its separate status will also facilitate the company's direct access to the capital market, eliminating the need to compete with other units of the Bayer Group when it comes to future investments.
The future prospects for both Bayer and the separate MaterialScience business are therefore extremely good. Nonetheless, the planned separation is a move that will raise a number of questions for many of you, also concerning your personal future. I would like to assure you that we are fully aware of our social responsibility in this situation. The employment levels are expected to remain stable over the next few years, both globally and in Germany.
I am convinced that the planned strategic realignment of the Bayer Group will prove to be the right course for all those involved and I am counting on your support.
We will be using corporate media to keep you updated on all further developments.
With best regards,