Bayer stockholders vote on the spin-off of Lanxess17 November 2004
At the Extraordinary Stockholders' Meeting in Essen today, November 17, 2004, the stockholders of Bayer AG will vote on the planned spin-off of the new chemical company Lanxess. Bayer AG management board chairman Werner Wenning described the vote as a milestone on the road to implementing Bayer's strategic realignment. 'Having thoroughly examined the various possible ways to accomplish the separation, we are convinced that a spin-off is the best option', said Wenning, outlining the opportunities resulting from the planned spin-off. The Bayer CEO also introduced Dr Rolf Stomberg, who is designated to serve as chairman of the supervisory board of Lanxess until the company hold their first stockholders' meeting. Wenning also reaffirmed the Bayer Group's operational earnings targets for the current year. 'This is an important day for our company', said Wenning, asking the stockholders to approve the spin-off and acquisition agreement between Bayer AG and Lanxess AG, the only item on the agenda of the meeting. In order for the spin-off to take effect, the stockholders must give their consent by a majority of at least 75% of the capital stock represented at the meeting. For every 10 shares he or she holds in Bayer, each stockholder will receive one Lanxess share in addition. It is intended to list Lanxess shares on the stock market in early 2005. The concept for the strategic realignment of the Bayer Group had already been approved by the annual stockholders' meeting in April. Accordingly, Bayer in future will concentrate on activities with high growth and innovative potential that are combined in the Bayer HealthCare, Bayer CropScience and Bayer MaterialScience subgroups. Wenning explained that the spin-off will allow the Bayer Group to concentrate the necessary resources on their core areas of health care, nutrition and high-tech materials, while Lanxess will be better able to adapt to competitive conditions in the future than it could as part of Bayer. Lanxess will focus on basic, speciality and fine chemicals, as well as on certain polymer activities that have for the most part reached a high level of market maturity. The Bayer chairman explained once again that the decision to conduct a spin-off was made because this method of separation provided a high degree of certainty that the transaction could be completed. 'The board of management of Bayer AG firmly believes that the spin-off of the Lanxess subgroup is in the best interests of Bayer AG and its stockholders, and that it serves those interests more effectively than any alternative course of action', Wenning said. The Bayer CEO expressed confidence about the new company's future: 'With its human and financial resources and its organizational structures, Lanxess has everything it needs to successfully manage its businesses as an independent company.' With sales in excess of e6 billion and some 20,000 employees, Lanxess will be among Europe's biggest chemical companies. In some 70% of its business units the company is one of the leading suppliers worldwide. 'Lanxess is also on the right track in terms of performance', Wenning added. He asserted that, judging by Bayer's results so far this year, the strategy is already beginning to bear fruit. 'Today we can reaffirm our earnings targets for 2004', said Wenning. Bayer will present its report for the third quarter on November 25 at the Fall Financial News Conference in Leverkusen. The four-member board of management of Lanxess AG was introduced to the stockholders for the first time at the extraordinary stockholders' meeting. The board members are Dr Axel Claus Heitmann (chairman), along with Dr Ulrich Koemm, Dr Martin Wienkenhöver and Matthias Zachert. Wenning explained that the supervisory board of Lanxess will consist of eight representatives of the stockholders and eight members representing the employees. He introduced Dr Rolf Stomberg as a designated stockholders' representative. Stomberg is to be nominated for election as chairman of the supervisory board. 'Dr Stomberg served as a top manager with the international BP Group for many years. His international experience will be of great value to Lanxess', said Wenning. It is intended that the first annual stockholders' meeting of Lanxess elect a new supervisory board in 2005. Bayer stress that this news release is not an offer for the sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended. Lanxess AG and Bayer AG do not intend to register any securities of Lanxess AG in the United States or to conduct a public offering of securities in the United States.