Bayer AG announced that it would sell its Animal Health business and is evaluating the sale of its Coppertone and Dr. Scholl’s brands, as well as other assets, as part of an effort to streamline the company, improve profitability and competitiveness.
The announcement comes as the company’s share price has fallen in recent weeks, driven in part by nearly 10,000 lawsuits filed against Monsanto’s widely-used weed killer, Roundup.
In August, a California jury found the product was responsible for causing cancer in a groundskeeper. The jury originally awarded $289 million, but a judge later reduced the judgement to $78.5 million. Bayer completed the $63-billion acquisition of Monsanto in June.
The restructuring will include a reduction of around 12,000 of 118,200 jobs worldwide, a significant number of them in Germany, the company said today.
“The planned reduction of around 12,000 jobs worldwide by the end of 2021 is accounted for as follows: at Pharmaceuticals, approximately 900 jobs in R&D and around 350 positions in connection with the factor VIII facility in Wuppertal; roughly 1,100 jobs associated with the reorganization at Consumer Health; around 4,100 positions at Crop Science as the result of integrating the acquired agriculture business; and a further 5,500 to 6,000 jobs in the Corporate Functions, supporting functions, Business Services and country platforms.”
During a call with reporters today, CEO Werner Baumann emphasized that the changes were “positioning the company for the future” and were “not made necessary by the recent acquisition” and “certainly, not by glyphosate litigation in the U.S.
“Absolutely nothing to do with it.” Baumann said.
The company stressed that the measures would lead to cost savings that would be reinvested.
“Bayer intends to allocate the investment resources necessary to support Animal Health to Bayer’s core businesses of Pharmaceuticals, Consumer Health and Crop Science,” the firm said in a release.
“Through the end of 2022 alone, we aim to invest a total of around $35 billion euros in our company’s future, with research and development (R&D) accounting for over two thirds of this figure and capital expenditures for just under one third,” CEO Werner Baumann said.
He said the changes are necessary and “lay the foundation for Bayer to enhance its performance and agility.
“With these measures, we aim to take full advantage of the growth potential for our businesses,” said Baumann. “We are aware of the gravity of these decisions for our employees. As in the past, we will implement the planned measures in a fair and responsible way.”
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