Bayer shareholder approval is needed at an EGM in November

Bayer shareholders will receive one share in the new Lanxess spin-off company for every ten shares which they hold in the Leverkusen-based chemicals group, it was announced today.

If the plan is approved by a majority of at least 75% of the capital stock represented, Lanxess will be listed on the stock market at the beginning of next year. The proposals are to be put to an extraordinary general meeting on 17 November. A total of 73 million shares will be allocated to Bayer stock holders under the spin-off plan launched by Bayer ceo Werner Wenning in 2003.

Lanxess is to hold Bayer’s interests in several polymers including ABS, nylon and PBT as well as its extensive synthetic rubber business and the bulk of the chemicals activities. On a pro forma basis, it would have generated an EBIT of E80m in the first half of this year on sales of E3.3bn.

Lanxess will start up with net debt of E1.5bn and Bauer says it is hoping for an investment grade or triple B credit rating following the purchase of a three year E200m mandatory convertible bond from the new company.

Lanxess’s liabilities to Bayer are to be redeemed by drawing on a E1.0bn to E1.5bn credit line.