BMS Town Hall Meeting
Bayer chief hears concerns on change
June 3, 2015 12:00 AM
A day after Bayer announced the new name for its plastics and chemicals business, its global chief executive, Marijn Dekkers, on Tuesday held an informal town hall meeting at the company’s Robinson campus where employees raised concerns about the pending separation of Bayer MaterialScience and how it would be managed.
“I think people were interested not so much in the decision [to spin off] material sciences … now they’re interested in the mechanics” of creating the new company that will be called Covestro, said Mr. Dekkers.
Speaking to reporters after the town hall event, he said Bayer would continue to own shares in Covestro once it is floated on the public stock market, but the Germany-based parent firm will not hold a majority vote on its management board.
The proposed public offering is set to occur by June 2016, and Bayer expects to gradually reduce its minority stake in the business over the next few years.
“Our goal is not in five to 10 years to own a lot of material-science shares,” said Mr. Dekkers. Bayer announced last year it would sell or spin off the unit so that it could focus on its high-growth businesses of health care and agricultural products.
Bayer MaterialScience makes polymers, coatings and other materials used in car parts, electronic devices, insulation and other products. On Sept. 1, it will officially become an independent subsidiary of Bayer and be renamed Covestro.
Though he described material sciences as a leader in its markets, Mr. Dekkers said Bayer decided through a strategic review to focus future investment on its health care and crop science units, which provide a better return.
“We can’t afford to do it all,” he said.
He compared Covestro to Bayer’s spinoff in 2004 of its rubbers and specialty chemicals business into a new company, Lanxess, which maintains its North American headquarters just west of Bayer along the Parkway West in Findlay.
“That should give people confidence that a company separate from Bayer can have a bright future. This is a strong, bigger company than Lanxess was, and Lanxess did quite well,” he said.
Mr. Dekkers declined to speculate on how much Bayer might reap from material sciences, but analysts believe the offering could generate $12 billion in cash.
“The shareholders ultimately will decide what it’s worth,” he said.
While it’s eyeing potential acquisitions in the pharmaceutical or animal health sectors, Mr. Dekkers said Bayer will use proceeds of the offering first to pay down debt.
“We’ve already bought a lot,” he said noting last year’s $14 billion purchase of Merck’s consumer drug business, which included the Claritin and Coppertone brands.
The 57-year-old chief executive said “it was time to come to Pittsburgh” because the separation of material sciences is “a big topic” at Bayer’s Robinson campus, which is the North American headquarters for the business.
About 400 employees attended the town hall, which was broadcast live to a total 12,000 workers at 51 Bayer sites in North America.
About 800 work for Bayer MaterialScience in Robinson, and the complex also houses another 600 to 700 employees who work in human resources, information technology, legal services and other administrative jobs for all of Bayer’s North American operations.
Another 1,000 in the region work for a unit of Bayer HealthCare that makes medical devices.
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