Slimmed down Bayer rules out merger
pharmafile | November 12, 2003 | News story | |
Bayer has unveiled a radical reorganisation of its business, including a refocused pharmaceutical division, but ruled out looking for a merger partner.
Head of media relations Gunter Forneck said the company had received various offers but none that would have added enough value to the company.
Consequently, he said, Bayer would not actively look for merger or joint venture partners, but the door would still be open to agreements like the one Bayer has with GSK to market its erectile dysfunction treatment Levitra.
In view of its poor performance in recent years, Bayer has down-sized expectations of its pharma division, which it wants to position as a mid-size pharmaceutical business. It will also have a stronger European focus than was previously the case.
The company will also spin-off its chemicals business, using the freed-up resources to invest in its other divisions and concentrate its pharma research on areas where it already has successful products, such as obesity and diabetes.
Following the company reorganisation into Bayer HealthCare, Bayer CropScience and Bayer MaterialScience operating subgroups, the company will concentrate on its healthcare, nutrition and innovative materials divisions.
Chief executive Werner Wenning predicted high growth potential in the retained areas, but warned of a corresponding need for investment.
"This means we do not have sufficient resources available to maintain or enhance the market positions of our chemicals business or all or our polymers activities.
"Following the separation, Bayer will be able to focus more closely on the core businesses in which we have excellent technologies, strong market positions and above all growth areas that we intend to further strengthen by pooling all resources," he said.
After the reorganisation the Bayer Group will be about 80% of its current size.
The company recently posted what it admitted were unsatisfactory third quarter figures, with group sales declining by more than 8% to Euro 6.83 billion, after a heavy hit from exchange rates.
Mr Wenning said that, despite signs of recovery in the US, he does not expect a sustained economic recovery before the end of the year.
The company expects future growth to come from the group-wide application of nanotechnology and an expanded use of biotechnology and genetic engineering.
Bayer Chemicals will be spun-off into an as-yet unnamed company, along with parts of Bayer polymers business by early 2005.
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