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November 20, 1995 01:00 AM

BAYER TO ACQUIRE MONSANTO STYRENICS

Bruce Vernyi
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    Ending five months of intense speculation, Monsanto Co. and Bayer AG announced Nov. 14 that Bayer will pay $580 million for Monsanto's styrenics thermoplastics business. The sale is expected to close before the end of the year.

    Monsanto of St. Louis announced June 9 it intended to sell its styrenics businesses, which include annual capacity tomake 375 million pounds of ABS,75 million pounds of styrene acrylonitrile and 20 million pounds of styrene maleic anhydride resins.

    Bayer of Leverkusen, Germany, is getting products that will round out its existing productlines and extend its reach into new areas, according to Lee Noble, president of the Bayer Polymer Division and executive vice president of Bayer Corp., the North Am-erican business unit of Bayer AG.

    The Monsanto business has 1,400 employees and sales of $700 million a year. After GE Plastics, Bayer will be the second-largest ABS supplier in North America.

    Since it announced the business was for sale, analysts said Monsanto launched an auction that included as many as five international companies.

    Bayer is acquiring Monsanto's Lustran ABS and SAN resins, Triax alloys and Centrex weatherable polymers. Also, Bayer will acquire Monsanto's Port Plastics manufacturing facility in Addyston, Ohio; its Applications Development Center in Springfield, Mass.; sales and technical facilities in Detroit; and manufacturing units in Iowa, Quebec and Belgium. Monsanto will continue to operate the manufacturing units under contract to Bayer.

    A joint venture in Thailand - Monsanto Premier Kasei Co. - is not included in the sale. That venture includes Monsanto; the Premier Group of Cos. of Map ta Phut, Thailand; and Mitsubishi Chemical Corp. of Tokyo.

    Facilities for Monsanto Premier Kasei are under construction in Map ta Phut, where production of styrenic thermo-plastics is expected to begin in 1996.

    However, Monsanto announced it has agreed to sell its 44 percent share of Monsanto Premier Kasei Co. to the Premier Group. Terms of that agreement were not disclosed. Further, the Premier Group also has agreed to purchase the shares of the joint venture from Mitsubishi, so that Premier will be the sole owner of the Thai company.

    Bayer intends to operate the Monsanto styrenics business as an integral part of its Polymers Division in Pittsburgh, Noble said. To that end, some Monsanto employees will be asked to relocate to Pittsburgh, he said. However, he said the Detroit, Springfield and manufacturing facilities will be relatively unaffected by the change of ownership.

    Bayer has been a longtime customer of Monsanto, using Monsanto's ABS resins to make ABS/polycarbonate blends, Noble said.

    The acquisition will benefit Bayer in several ways, Noble said. While giving Bayer added engineering resins, he said his company also is acquiring manufacturing technology, patents and know-how that could be transferred to Bayer facilities in Germany. Bayer produces ABS in Germany using batch processes, while Monsanto has continuous mass production technology, Noble said.

    The new resin products will strengthen Bayer's position in the automotive, business equipment, consumer products and appliance industries, he added.

    Bayer also is gaining an entry to ABS markets for pipe and sheet products, which Noble acknowledged could be considered low-tech areas in comparison to the company's other markets.

    However, he said those markets are challenges in which his firm may apply its advanced technology in the future.

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