Bayer AG (ETR:BAYGN)'s CEO, Bill Anderson, is contemplating a significant restructuring of the pharma-agriculture conglomerate, potentially dismantling the legacy of his predecessor, Werner Baumann. This move is seen as a reaction to the contentious $63 billion Monsanto (NYSE:MON) acquisition, a decision fiercely defended by Baumann despite opposition from activist investors.
Anderson's plans may include separating the consumer-health or crop-science divisions of Bayer (OTC:BAYRY) - a strategic shift towards focusing on core operations. This approach was previously resisted by Baumann, who faced mounting pressure from activist investors following the troubled Monsanto takeover. The acquisition left Bayer burdened with significant debt and legal issues related to Roundup, Monsanto's flagship herbicide product.
The need for restructuring has been further highlighted by the company's recent financial performance. Bayer's Q3 earnings saw a significant drop of 31%, falling to €1.69 billion ($1.80 billion) due to declining glyphosate prices - a key ingredient in Roundup.
Despite an annual drop of 20%, Bayer's shares have remained stable in Frankfurt trading. Markus Manns of Union Investment suggests that restructuring Bayer could enhance its capital market appeal.
Anderson expressed dissatisfaction with the company's financial situation, criticizing the zero cash flow against a revenue of €50 billion for the year. He plans to reveal future strategies on an investor day scheduled for March, which may include removing management layers as part of an overall restructuring plan. This comes as Anderson faces multiple challenges and shareholder criticisms since joining Bayer.
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