German chemical giant Bayer AG is set to become a "pure life-sciences company" following a reorganization process set to be completed early next year.
The company announced the overhaul of its HealthCare, CropScience and other operations in a letter sent to employees Wednesday, though it indicated specific decisions on what the company will look like next January haven't yet been made.
The reorganization comes ahead of the spinning off of Bayer's plastics division, which was announced in September. MaterialScience, valued at about $11.7 billion, could be listed publicly or spun off; an initial public offering is reportedly targeted for mid-2016.
Bayer's plastics division had projected 2013 sales of more than $14 billion and has a workforce of some 16,800, while it includes technology aimed at cutting costs in plastics manufacturing. The company, however, intends to focus entirely on pharmaceuticals and crops, which are more profitable sectors.
Company officials said Wednesday a reorganization would be necessary to complete that transformation.
"We will be a pure life-sciences company and must organize ourselves as such," said spokesman Guenter Forneck.
The proceeds from an IPO of MaterialScience, meanwhile, are expected to be used to explore further acquisitions in pharmaceuticals. Bayer acquired Merck & Co.’s consumer drug operation last year, and its CEO is reportedly interested in increasing its veterinary drug holdings.
Bayer is also reportedly pursuing a sale of its diabetes device operations.