Bayer to sell metal unit to U.S. investors

German chemical and drug maker Bayer said Thursday that it would sell its HC Starck division to U.S.-based private equity firms Advent International and Carlyle Group for more than $900 million in cash.

Starck, headquartered in Goslar in northern Germany, makes metal and ceramic powders, specialty chemicals and parts made from advanced ceramics and metals.

It employs 3,400 people at 15 sites in Europe, Asia and North America and posted 2005 sales of 920 million euros ($1.2 billion).

Bayer said it would use the proceeds to help finance its acquisition of rival German drug maker Schering, for which Bayer agreed in June to pay $22 billion.

Starck’s buyers would also assume $580 million in debt. The deal is expected to close in early 2007, pending approval from regulators.

Advent and Carlyle plan to develop the Starck business so that it can be sold through an initial public offering in three to five years, Bayer said.

Ralf Huep, a manager in Advent’s Frankfurt office, said Starck had “enormous growth potential.”