Bayer, one of the world's largest pharmaceutical and chemical companies, planned to split off its polymer business to form a new separate business.
The German drug maker made a bold move to oil its gears towards becomes a definite pharmaceutical brand.
Bayer originated in Germany in 1863 as chemical company producing textile dyes, but has diverted its attention to making drugs.
Currently Bayer gets almost half of its sales from its health care business. One of the company's famous health care products includes Aspirin.
"Our intention is to create two top global corporations: Bayer as a world-class innovation company in the life sciences businesses, and Material Science as a leading player in polymers," as quoted by Marijn Dekkers, Bayer chief executive on Sept. 18.
Bayer's management board and supervisory board made a thumbs-up to spin-off the company's polymer business, Bayer MaterialScience into a separate company in the next 12 to 18 months.
A company does a spin-off when it tries to find buyers for parts of their business who will make a good offer but are not able to find one. The company then decided to change or replace the business.
In this case, Bayer decided to give priority to its life sciences businesses instead.
The separation will focus more of its resources to their life science businesses which include health care and products for crop development.
The life sciences businesses of Bayer generate 70 percent of its sales, with $24.5 billion coming from health care in 2013.
Bayer recently acquired another health care company's consumer care business, that of Merck's. The company bought it for $14.2 billion, which includes right for allergy medicine Claritin, foot care brand Dr. Scholl's and Coppertone sunscreen.
The acquisition pushed Bayer on top of the charts and one of the largest over-the-counter health care providers.
Meanwhile, the spin-off will benefit the life sciences businesses of Bayer and is expected to generate 29 billion euros in the year.
