As Bayer’s new CEO Bill Anderson kicks off his first full year at the helm with an objective to revamp the company, a prominent German trade union is pressing to keep the large conglomerate together.
Germany’s IG BCE is pushing back against a long-rumored potential split of the company’s three segments over concerns of possible German job losses, Reuters reports.
Besides potential job losses, the union takes issue with the possibility of takeovers that could follow if a split weakens Bayer’s individual segments, according to the news service.
The group is similarly wary of Anderson’s plan to hack off multiple layers of middle management by the end of 2024, Reuters reports. During Bayer’s third-quarter earnings call, the new CEO called the 12 layers of management between himself and customers “simply too much.”
“We are redesigning Bayer to focus only on what’s essential for our mission and then getting rid of everything else,” Anderson said on the call.
When the Roche pharma vet took over at Bayer last year, he stressed that “nothing was off the table” in terms of Bayer’s potential future structure. For now, Anderson has said that a simultaneous split of Bayer's pharmaceutical, consumer healthcare and crop sciences divisions would be “not feasible.”
The company will divulge more information on its strategic plans during an investor event slated for March 5.
Letting go of crop sciences might be tricky because of ongoing litigation relating to the Round-Up weedkiller, an asset the company took on when former CEO Werner Baumann acquired Monsanto early on in his tenure. The thousands of lawsuits “might limit the company’s leeway” to spin off or divest the unit, analysts at ODDO BHF wrote in a November note to clients.
Coupled with the failure of a blood thinner prospect in a phase 3 study, the analysts warned that Anderson's options might be limited.
“With a much weaker pipeline in pharma, cash flow from other divisions may now be needed even more to further develop the pipeline and compensate for dwindling revenues from blockbuster drugs losing their exclusivity,” the ODDO team wrote at the time.
Despite the setbacks, Anderson said the events don’t have an impact on Bayer’s “strategic options,” but instead might mean that “some of those conditions are a little tighter than they otherwise would be,” the CEO noted on a November call with investors.
IG BCE is made up of 600,000 members and is one of the eight organizations in the German Trade Union Confederation umbrella.