Bayer keeps mum on sale of material sciences unit headquartered in Robinson
April 28, 2014 11:00 PM
The familiar Bayer logo welcomes visitors to the company's 300-acre campus in Robinson.
By Joyce Gannon / Pittsburgh Post-Gazette
Bayer AG’s top executive Monday declined to comment on reports the German company is exploring a sale of its material sciences segment, which has its North American headquarters in Robinson.
In an interview broadcast on CNBC after the drug and chemicals giant released its first-quarter earnings, Marijn Dekkers, chief executive of Bayer said, “I don’t want to speculate on portfolio changes.”
Bloomberg News reported Monday that Bayer is considering selling off the material sciences unit — which produces plastics, coatings and chemicals used in foams, insulation, auto lights and DVDs — because it wants to focus on expanding its health care business. The health care portfolio includes the iconic Bayer aspirin, Aleve, One-A-Day vitamins and other consumer brands and prescription medications.
Bloomberg, citing unidentified sources familiar with private talks about a possible sale, said Evonik Industries, another German company, had expressed interest in buying Bayer MaterialScience some months ago.
Speculation about selling off the business isn’t new — especially since Bayer spun out much of its specialty chemicals operations a decade ago into a new company, Lanxess. But the divestiture talk has heightened since Mr. Dekkers became chief executive in 2009 because he has said future growth will focus on life sciences including Bayer’s pharmaceuticals and animal health divisions.
In the Pittsburgh region, Bayer employs about 2,200 workers, including about 1,200 in Robinson and another 1,000 at a medical device business formerly known as Medrad. The company doesn’t maintain production facilities for material science in the region, but the segment’s North American executive staff and much of its research and development operation is based here.
In the CNBC interview Monday, Mr. Dekkers said the material sciences business was “moving in the right direction” after its global earnings jumped by nearly 80 percent in the first quarter.
Overall for the quarter, Bayer reported higher sales and income on the strength of new drugs and the improvement in the material sciences unit.
Net income was 1.42 billion euros ($1.96 billion), up 23 percent from a year ago. Global sales totaled 10.6 billion euros, up nearly 3 percent from first-quarter 2013 and slightly better than analysts’ estimates of 10.5 billion euros.
Earnings before interest, taxes, depreciation and amortization jumped by 12 percent to 2.74 billion euros and beat analysts’ estimates of 2.56 billion euros.
In North America, total revenues were 2.68 million euros ($3.68 million).
Among the drugs that helped boost sales in Bayer’s pharmaceuticals segment were Xarelto, a blood thinner; Stivarga, a colon cancer treatment; and Eylea, a treatment for the eye condition macular degeneration.
Shares of Bayer rose 4 percent Monday on the Frankfurt stock exchange in response to the better-than-expected earnings, reports about the possible sale of material sciences, and a fresh wave of speculation about mergers in the drug sector.
Last week, reports surfaced that Bayer is among the companies in the running to buy Merck & Co.’s consumer health care business.
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