German chemical and drug maker Bayer AG said Thursday that it will sell its HC Starck division for ¤1.2 billion (US$1.5 billion) to financial investors who plan to float it on the stock market, AP reported. Bayer said it agreed after an auction to sell the division to private equity firms Advent International and The Carlyle Group for more than ¤700 million (US$900 million) in cash. The buyers also assume debt and other liabilities totaling ¤450 million (US$580 million). The deal should close in early 2007, pending approval from regulators. Bayer said it would use the proceeds to help finance its acquisition of rival German drug maker Schering AG. HC Starck, headquartered in Goslar, northern Germany, makes metal and ceramic powders, specialty chemicals and parts made from advanced ceramics and refractory metals. It employs 3,400 people at 15 sites in Europe, Asia and North America and posted sales of ¤920 million (US$1.2 billion) in 2005. «We are convinced that HC Starck will have very good development prospects under the new owners,» Bayer chief executive Werner Wenning said. Advent and Carlyle plan to develop the HC Starck business so that it can be sold through an initial public offering in 3-5 years, Bayer said. Ralf Huep, a manager at Advent in Frankfurt, said HC Starck had «enormous growth potential.» «We will work closely with management and Carlyle to leverage these strengths and continue the successful development of HC Starck's business,» Huep said. Shares in Bayer were up 0.6 percent at ¤40.01 (US$31.07) on the Frankfurt Exchange.
