Bayer Decides Against Splitting Up Company For Now — Update

By Dominic Chopping

Bayer won't break up the company into separate units just yet, Chief Executive Bill Anderson said.

"On the question of the company's structure and a possible breakup of the group, our answer is 'not now'--and this shouldn't be misunderstood as 'never'," Anderson said Tuesday.

The German pharmaceutical and agricultural conglomerate has been looking into various options for the group as it seeks to cut debt and boost its beleaguered share price.

Bayer operates through three business units: crop science, consumer health and pharmaceuticals, and has been under pressure from investors to break itself up as the units are diverse and the company is one of few remaining groups to house both pharmaceutical and consumer-health assets under the same roof.

However, rather than split itself up through a spinoff, Bayer has decided to spend the next 24 to 36 months focusing on building a strong pharmaceuticals pipeline, addressing litigation, reducing debt, and continuing to implement its new operating model to improve performance, it said.

The rebuild of its pharmaceuticals pipeline follows the recent discontinuation of key experimental drug asundexian. Bayer had backed the blood-thinning drug for stroke prevention to become the biggest growth driver among its pharmaceuticals, but trials were halted late last year after disappointing results.

The company also remains embroiled in legal battles stemming from its Monsanto business, as plaintiffs blame Monsanto's Roundup weedkiller for causing cancers. The $63 billion acquisition of Monsanto in 2018 was designed to turn the inventor of aspirin into the world's biggest crop-science business, but instead saddled it with debt and litigation.

Building on recently announced plans to cut into several layers of management to streamline operations, the company said the move will take out 2 billion euros ($2.17 billion) of costs and accelerate decision-making to make its businesses leaner and more effective.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

March 05, 2024 02:34 ET (07:34 GMT)

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