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news.Akzo Nobel NV, the Dutch chemicals and drugs group, has revealed plans to separate its two businesses within the next two to three years.
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In the first step towards this overall goal of creating two independent companies, Akzo said that it would seek a minority listing of its pharmaceuticals business, to be called Organon Biosciences, through an IPO on Euronext Amsterdam.
The IPO is expected to take place in the second half of 2006, although Akzo acknowledged that the exact timing would be dependant upon developments within Organon Biosciences’ pipeline.
Following the IPO, Akzo intends to separate the Pharmaceutical business fully within two to three years. The spin-off of the pharmaceuticals unit would then allow Akzo to focus on its coatings and chemicals business.
The definitive decision on the separation of the two companies is subject to approval by a meeting of shareholders. The news has, however, met with initial investor approval. Shares in the group climbed over 5% after trading opened in Amsterdam.
“Over recent years, we have made significant progress related to our strategy of fixing pharma, refocusing our chemicals portfolio and continuing to grow and invest in our coatings business,” said Hans Wijers, CEO of Akzo Nobel. “As a logical next step, and after a thorough strategic review, we believe that creating two independent companies, will enhance shareholder value.