The right cure

18 October 2005 By Nina Koeppen

The German pharma and chemicals group should be able to eliminate its conglomerate discount by splitting into two businesses. But the company could do better by selling off its drugs division, which could be worth more than the entire company.

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Altana is preparing to sell its pharmaceutical business for as much as $7bn, the Wall Street Journal reported. The German group declined to comment on the report.

Altana consists of two operating divisions, namely pharmaceuticals and chemicals. Susanne Klatten, a member of the Quandt family which also owns a large stake in BMW, owns a 50.1% stake in Altana.

The company in August announced that it intends to separately list the two divisions from 2006. Altana, which has a current market capitalisation of about E6.4bn, has yet to explain how it expects to separate the units legally.

At midday on Tuesday, Altana shares traded at E46.23, up 1.8%.

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