Akzo Nobel will ask its shareholders to approve the split of its business into two separate companies – one focusing on pharmaceuticals and the other on coatings and chemicals – on September 7.
The Dutch group first announced the move to set up Organon Biosciences as a discrete pharmaceutical enterprise, with Akzo Nobel retaining the non-pharma activities, in February. The separated company will focus on specialty therapeutics, including hormonal treatments, vaccines (from its Nobilon unit) and central nervous system drugs.
The first phase of this separation – the creation of Organon Biosciences via an initial public offering (IPO) - is scheduled to have occurred by early 2007, although the group has said that the split could take two to three years more to complete.
Today, Akzo revealed that it intends to sell 20% to 30% of Organon Biosciences as part of that IPO, although it cautioned that "the final timing and structure of the separation will depend on market conditions, as well as on developments at Organon BioSciences, including its product pipeline."
The move comes after a concerted effort by Akzo's management, started in 2004, to 'fix pharma' and turn around a business that, at the time, was facing patent expirations on key product lines, safety issues with some products and an increasingly competitive operating environment for its contract manufacturing business.
Pharma has been considered as a somewhat maverick operation among Akzo’s chemical interests, a distraction for management yet too small to compete effectively in the global drug sector.