Covestro AG, the former Bayer AG MaterialScience business, is preparing for an initial public offering before the end of the year.
The company is now legally and economically independent, and remains a 100 percent subsidiary of Bayer. However, Leverkusen, Germany-based Bayer announced Sept. 4 that it will take take Covestro public this year.
Covestro shares will be listed on the Frankfurt Stock Exchange in the fourth quarter of 2015, the company announced. Bayer's announcement did not specify how much money the IPO would raise or the estimated price per share. Reuters reported that Bayer is telling investors that the offering will raise about 2.5 billion euros ($2.8 billion).
Bayer is spinning off Covestro in order to concentrate exclusively on its life sciences businesses.
“We have been evaluating the optimal way for the separation of the MaterialScience business and believe that an IPO delivers clear benefits for both Bayer and Covestro and their stakeholders,” said Bayer CEO Marijn Dekkers, in a news release.
Covestro intends to use the proceeds from the IPO to repay debt to Bayer.
“Covestro's IPO is a further step in the transition to an independent company. It will give us the opportunity to build our position as a pure-play polymers producer with strong competitive advantages,” said Patrick Thomas, CEO of Covestro. “We are confident that investors will welcome the opportunity to invest in a market-leading, focused business through this transaction.”
With sales in 2014 of 11.7 billion euros ($13.16 billion), Covestro is among the world's largest polymer companies, with a focus on the automotive, electrical and electronics, construction and sports and leisure industries.
Covestro, like Bayer, is headquartered in Leverkusen. It makes a range of raw materials used in both flexible and rigid foams, polycarbonate used in the auto and medical device industries and in coatings, adhesives and films.
The company will make its trade show debut at Fakuma in Friedrichshafen, Germany, Oct. 13-17.
Covestro has 30 production sites around the globe and employed approximately 14,200 people at the end of 2014.