Agfa spikes rumors that parentis planning to sell business

July 19, 1995

Bayer chairman's comments feed rumor millOfficials at film and PACS vendor Agfa say the company's parentfirm Bayer AG of Germany has no intention of selling the firm,contrary to a rumor that has been circulating in the medical imagingindustry

Bayer chairman's comments feed rumor mill

Officials at film and PACS vendor Agfa say the company's parentfirm Bayer AG of Germany has no intention of selling the firm,contrary to a rumor that has been circulating in the medical imagingindustry for the past several months.

Industry tongues started wagging after a news conference heldby Bayer in Europe last March, according to Dionn Tron, vice presidentof corporate communications for Agfa's U.S. subsidiary in RidgefieldPark, NJ. At the press briefing, reporters queried Bayer chairmanManfred Schneider on the strategic fit between Bayer and Agfa.Schneider acknowledged that there were few synergies between Bayer,a chemical and pharmaceutical firm, and Agfa, a film company thatis building its presence in digital imaging. As to whether ornot Bayer would divest Agfa, Schneider said Bayer would do soonly "if the price was right."

After the interview was published in the European press, Schneider'scomments were misconstrued to mean that Bayer had put Agfa onthe block. Nothing could be further from the truth, accordingto Tron.

"His answers stated the obvious," Tron said. "Bayeris a chemical and pharmaceutical firm and Agfa is involved infilm and digital imaging. As the imaging industry becomes moredigital, we have less and less in common and fewer synergies withpharmaceutical and chemical companies."

Schneider's comment that Bayer would sell Agfa for the rightprice is a moot point because the most likely firms with the cashand the interest in buying Agfa would be film companies such asEastman Kodak or Fuji. These firms would probably be barred frombuying Agfa due to the monopoly position the new entity wouldhave in the U.S. film market, Tron said.

Tron emphasized that while Agfa's return on investment is notas high as Bayer's pharmaceutical business, the company has beendoing well and its parent is committed to keeping the business.She cited Bayer's recent decision to purchase the offset printingplate division of Hoechst AG and merge it with Agfa as an exampleof Bayer's long-term commitment to growing Agfa's business.

Agfa has been forced to exercise damage control to squelchdivestiture rumors spread among its customer base by the competition,and hopes that the industry gossip mill will not have an impacton its business.

"Our competitors are taking those reports from Europeand are using them with our customers," Tron said. "Weare a little flattered by that because if our competition is usingthis against us, they must consider us a formidable force in themarket."