LEVERKUSEN, Germany - Bayer AG announced plans to spin off its chemicals division and part of its polymers business in a restructuring that will create a new chemical company and place the emphasis for Bayer's existing drug business on Europe.

The company said, however, that the spinoff will not include its coatings raw materials business, which Bayer said remains a key growth area. Following the spinoff, Bayer said it would be better able to concentrate on its three remaining businesses: drugs and health-care equipment; agricultural chemicals; and specialized industrial products, including coatings and plastics raw materials.

The new chemicals company, called NewCo, will be floated on the stock market by early 2005. The business's portfolio of approximately 5,000 products will encompass basic, specialty and fine chemicals and polymers. Included are inorganic pigments for concrete and plastics colorant applications, polymer additives such as flame retardants and plasticizers, and other materials for the rubber and plastics markets.

Bayer said it plans to continue to pursue expansion of its plastics and coatings materials business, where the company said it holds "global leadership positions" in polyurethanes and other coatings raw materials. Bayer said it will direct particular focus on the growth markets of Asia, noting that the company is currently building or planning several new production facilities there