April 13. 2024. 5:11

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Rumours of pharma giant Bayer facing break-up swirl

Rumours that Bayer could be split up following the early replacement of its CEO triggered by the takeover of US corporation Monsanto, are swirling in Germany, leading to outcry from unions but a rise in share prices.

On Wednesday, the company announced it would replace CEO Werner Baumann early, bringing in the ex-head of Roche pharma company Bill Anderson to replace him. Baumann’s popularity had suffered a number of hits, particularly with shareholders over the company’s lacklustre share prices and the troubled takeover of Monsanto.

Baumanns tenure was due to end in 2024, but now Anderson will take the helm from June.

Bayer is comprised of three divisions- pharmaceuticals, consumer health and crop science. Following the announcement of Bauers departure, rumours swirled that a breakup could be imminent.

The German IGBCE union reacted to the news by opposing any splitting of divisions and warning that the company must not bow to pressure from hedge fund activism.

“You can only manage the transformation of the industry with a corporate policy based on risk diversification and sustainability – not on hedge fund activism,” Grioli said.

Previously, internal papers had been leaked to several media outlets, which calculate the potential added value of a breakup. Bayer is among Germany’s top ten biggest companies in terms of market capitalisation.

Recently, however, the chemicals giant took a heavy blow following the takeover of US agrochemicals company Monsanto, the producer of the contentious herbicide Roundup.

With the company, Bayer also took over a multitude of pending legal suits over the substance’s harmful side effects – something that made stock prices plummet.

However, the news of the changer of leadership resulted in share prices reaching an eight-month high on Thursday, with shares rising as much as 5%.

(Julia Dahm | EURACTIV.de)