Bayer open to takeover bids
pharmafile | October 21, 2003 | News story | |
The Chief Executive of Bayer has conceded the company cannot continue alone, and has now declared the company open to takeover offers from pharmaceutical rivals.
The admission has come after discussions with several companies fell through when Bayer refused to accept a minority stake, and the company has now stated that restructuring of its pharma division will not be enough to lift it from the doldrums.
The German conglomerate received a near knock-out blow last year when it was forced to withdraw it most promising product, Lipobay, after it was linked with patient deaths in Europe and the US.
"A possible partnership will not be prevented by rigid insistence on Bayer having a certain shareholding",Werner Wenning told an investor conference in Leverkeusen. "We will proceed pragmatically and attempt to achieve the optimum scenario for our business and our stockholders".
"One thing has become clear, however: we can no longer realistically expect Bayer to have a majority interest in a partnership that would at the same time benefit our business. Therefore, the pursuit of this option is currently no longer a priority".
Bayer confirmed it was in new discussions, and said its pharmaceutical strategy would be to focus on therapeutic areas where it had "expertise all the way along the value chain" so it could play a big a part as possible in a future merger.
Analysts are, however, split over whom the most likely buyer will be. Swiss neighbour Novartis has been mentioned as a good cultural fit whereas GlaxoSmithKline, which already partners Bayer in the marketing of impotence treatment Levitra, is also thought to be in the running.
Meanwhile, some analysts are predicting that a Japanese pharma company looking for a European infrastructure could be the dark horse in the contest to buy out the struggling company.
The company's restructuring programme of divestments, cost cutting and staff reductions has continued apace as it looks to save E400 million by the end of 2004. The company plans to cut 15,000 jobs by the end of 2005 with just over a third of those coming from Germany.
The company posted a E656 million profit for the third quarter this year, a marked improvement on a loss for the same period in 2001.
The company's product problems go deeper than the withdrawal of Lipobay, with healthcare sales falling 5% largely due to shrinking demand for antibiotic Cipro and heart drug Adalat.
