Bayer chief revives Agfa speculation

Call it the rumor that refused to die. The chairman of Agfa parentBayer has again renewed speculation that the German pharmaceuticalgiant is planning to spin off Agfa into an independent company.In an interview with the German press, Manfred Schneider repeatedstatements made last year that Agfa's profitability is too lowand that Bayer may divest the company in the next several years.

On two occasions last year, Schneider told reporters that therewere few synergies between Bayer and Agfa, because Bayer is apharmaceutical and chemical company and Agfa is moving into digitalimaging, and that Bayer might be interested in selling or divestingAgfa.

Schneider made comments earlier this year that seemed to putthe matter to rest, however, saying that Bayer had no intentionof divesting Agfa (SCAN 2/28/96). He apparently reversed himselflast month, again stating that Agfa's 3% profit margin is toolow compared with the 10% margin the Bayer group is targeting,according to AFX News.

Schneider and Bayer CFO Helmut Loehr said that Bayer would workto improve Agfa's profitability and will decide whether to divestthe company next year. A sale is not likely, due to antitrustconcerns and the probable difficulty in finding a buyer at a priceBayer would find acceptable.

Schneider's most recent comments are nothing new, said DionnTron, Agfa vice president of corporate communications.

"I think that the comments he made were an update on (thesituation). There aren't any intentions to sell Agfa; going publicremains an option," Tron said. "We've been asked toimprove our profitability. We've been working to do that, andwe're beginning to see the results of that effort."