Arnhem, the Netherlands, February 7, 2006.
- Akzo Nobel to create two independent companies: Coatings / Chemicals and Pharmaceuticals
- Intended first step is a minority divestment of its Pharmaceuticals business, to be called Organon Biosciences
- Timing dependent on important developments within Organon Biosciences's pipeline which are expected in the second half of 2006
- Full separation of Organon Biosciences expected within 2-3 years after initial divestment
"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, Coatings/Chemicals and Pharmaceuticals, will enhance shareholder value through both increased management and strategic focus, and greater transparency. Both businesses are strongly positioned to grow independently."
Akzo Nobel's Core Focus on Coatings/Chemicals
"The increased management and strategic focus afforded through the separation of Pharmaceuticals will enable us to accelerate growth and invest in attractive expansion opportunities in our Coatings and Chemicals businesses," emphasized Hans Wijers.
"Our Coatings business is the market leader, and our recent acquisitions underscore our commitment to pursuing opportunities globally, including in emerging markets. Our refocused Chemicals business is well positioned for growth, based on leading positions in our five core platforms."
Organon Biosciences Growth Platform The new Pharmaceuticals business will include Organon and Intervet, and will be renamed Organon Biosciences. "The future of Organon Biosciences is strong," said Toon Wilderbeek, Akzo Nobel's Board of Management member responsible for Pharmaceuticals and designated CEO of the new company.
"The business is at a turning point and positioned to deliver strong, profitable growth. Our pipeline continues to progress and our strategy for seeking co-development and co-promotion partnerships provides incremental expertise for our business. At the same time we will continue to expand our biotechnology activities through our manufacturing expertise and knowledge of recombinant technologies.
"Intervet, a global leading animal health company, is complementary to our pharmaceuticals strategy, combining the leading position in vaccines and biologics with strong financial performance. By bridging Intervet's extensive biological and vaccines experience, we believe we can continue building a successful human vaccines presence through our Nobilon business."
careful consideration, management believes the appropriate first step in creating two independent companies is a minority listing of Organon Biosciences through a listing on Euronext Amsterdam. Thereafter, Akzo Nobel intends to separate the Pharmaceutical business fully within 2-3 years.Management believes this staged process best meets Akzo Nobel's long-term objectives and will create greater value for shareholders.
The final timing will be dependent on important developments within Organon's pipeline which are expected in the second half of 2006, including Phase III data for asenapine, as well as on market conditions. Further information will be provided later in the year.
The definitive decision on the separation of the two companies is subject to approval by an (extraordinary) meeting of shareholders and consultation with relevant employee representative bodies.
Akzo Nobel has engaged Morgan Stanley and ABN AMRO as financial advisors on these matters.