Bayer will get a new boss in the summer. But he may not be able to watch over the pharmaceutical and chemical empire for long: Activist major shareholders are pushing for the group to be broken up in order to increase the company’s value – a mistake, says the IG BCE union.
The chemical union IG BCE warns of a break-up of the group after an announced change of boss at Bayer. “From the employees’ point of view, Bayer, with its three pillars, is perfectly positioned to meet the challenges of the future,” says Francesco Grioli, member of the union board and Bayer supervisory board, in the “Rheinische Post” with a view to the areas of health, agrochemicals and plastics. “The transformation of the industry can only be managed with a corporate policy based on risk diversification and sustainability – and not on hedge fund activism.”
The pharmaceutical and agrochemical group announced a change of boss on Thursday. The controversial CEO Werner Baumann will vacate the post this summer. At the beginning of June, the ex-pharmaceutical boss of Swiss rival Roche, Bill Anderson, is to take over in his place.
Baumann has been criticized for a long time. The 2018 takeover of the US seed manufacturer Monsanto for 63 billion dollars depends on the manager. With the purchase, the Leverkusen-based company had brought expensive legal disputes into the house about alleged cancer risks from the weed killer glyphosate.
This is one of the reasons why Bayer stock has been falling for years. In 2019, the shareholders even refused to discharge the CEO at the annual general meeting. It has long been known that Baumann is not looking to extend his contract. His working paper runs until 2024.
Long-term strategic investors had exerted the pressure. Most recently, several activist Anglo-Saxon investors such as Bluebell Capital got involved. According to a media report, Bluebell is pushing for the group to be split up.
The very small fund with an unknown stake in Bayer is known for aggressive action. A spin-off “of the Consumer Health division would be a possible way to increase the company’s value,” says Markus Manns, fund manager at Union Investment, in the “Rheinische Post”. On the other hand, he does not consider a spin-off of the much larger agricultural division Crop Science to be feasible.
