The Bayer Group is seeking to extend its span of operations from plastics and chemicals production to cancer and eye medication. This leading DAX 30 company has a market capitalization of €95.802 billion, and it has posted a year-to-date return of 2.04%. Bayer will soon launch an Initial Public Offering (IPO) for its plastics and chemicals division known as Covestro at a €10 billion evaluation. At that valuation, the company will be the largest German listing for an IPO. The transition for Bayer is especially significant, since this marks a turning point from a multi-national conglomerate that focused on many aspects of the chemical industry, to one that is now gun-barrel focused on life sciences.
As early as 2001, Bayer made the transition to life sciences with the acquisition of Aventis CropScience for a sum of €7.25 billion. By 2004, the Bayer Group had branched out to a speciality chemical operation. This has since come to be known as Lanxess. Barely 2 years later, the Bayer Group shelved out €17 billion for a German healthcare enterprise known as Schering. The list of major acquisitions by Bayer has accelerated under its new CEO, Marijn Dekkers. In 2014, Bayer purchased the consumer healthcare operation of Merck for $14.2 billion. That Bayer is floating Covestro is yet another milestone in the company’s diversification strategy.
The Bayer Group has been meticulously planning its strategic path to ranking status as a drugs manufacturer. When Bayer acquired Merck, it became the second largest OTC drugs manufacturer. And with the Covestro IPO soon to launch, Bayer will be able to conduct substantially more R&D into pharmaceutical work.