The construction sites of the new Bayer boss Bill Anderson – economy

It wasn’t until the decision was made to leave Bayer boss Werner Baumann and the successor was known that the man, who likes to wear a T-shirt under his jacket and doesn’t know much about hierarchies, came out of cover. “I couldn’t be happier to announce today that I’m joining the team Bayer join as CEO,” wrote William Anderson, who prefers to be called Bill, on the LinkedIn social network.

The fact that someone is happy that he wants to join a team on June 1st is probably one of the things that a new Bayer boss who has just been elected says. But those of the approximately 100,000 Bayer employees who wanted to know exactly how things are going from now on just had to read on on Linkedin. Because the 56-year-old chemical engineer, who was most recently head of the pharmaceutical division of Swiss competitor Roche, also said goodbye to his old employer. For 17 years he was “just a colleague” https://www.sueddeutsche.de/wirtschaft/ “Like many others” he had for a Pursue worked that he loves. Just been a colleague, loved the company – the new one at the top, he made that clear right from the start, ticks differently than the outgoing boss. Here is 60-year-old Werner Baumann from Krefeld, the son of a baker who had worked his way up to the top boss in this all-German company for 35 years. And then there’s Anderson, a graduate of Boston’s elite MIT with stints in the tech and biotechnology industries. The fact that Anderson, unlike Baumann, is not a financier should not be entirely unimportant.

The question now is: what will the American do with what his predecessor left him? There would be many options. He could restructure Bayer, but leave the company as it is for now. But he could also split up the group, as demanded by so-called activist investors. Simply dissolve the group in its current form with its pharmaceutical, seed and consumer health divisions with their non-prescription products such as Bepanthen or Aspirin.

Because Bayer is in a deep crisis, and now the man in the T-shirt has to solve it.

Investors see it all very differently. Some would probably prefer it if Anderson grabbed the hammer immediately. Marc Tüngler, general manager of the German Association for the Protection of Securities (DSW), says he “doesn’t assume that Bill Anderson was brought in to break up Bayer.” This is probably not his goal either. That’s why it’s important “that he is now given the time” to “restructure the company and improve the share price again. If it goes back towards 80 euros, things will automatically calm down.” Bayer shares were listed at around 61 euros on Thursday. From this point of view, it could be some time before things calm down again.

The drama began when the aspirin maker bought a controversial company

If you want to understand why the group is in crisis, you have to go back to 2018. Bayer, known to many primarily as an aspirin manufacturer and supplier of German home pharmacies, bought the American seed manufacturer at the time Monsanto, for the incredible price of 63 billion dollars. That was a lot of money for a hated company that its critics called “Monsatan” or “Mutanto” because the quite common herbicide “Roundup” contains glyphosate and is said to cause serious diseases such as cancer.

But Baumann wanted to create something big, form one of the world’s largest seed manufacturers. In the end he made Bayer smaller and smaller. Lawsuits worth billions from people who attributed their illnesses or the death of relatives to Monsanto products drove Bayer’s share price further and further into the basement. One could have imagined that, probably even: had to. But Baumann, also driven by the former chairman of the supervisory board Werner Wenning, had pulled through the deal at the time – despite all warnings.

The many lawsuits with an uncertain outcome, the share price in free fall, something like that ultimately attracts a special type of shareholder, so-called activist shareholders. Activist Anglo-Saxon investors like Jeff Ubben’s Inclusive Capital Partners fund or Bluebell Capital. At first it seems to be enough for some to get rid of the director of the poisonous Monsanto drama. Others like Bluebell, however, would prefer to tear Bayer apart completely. Such a thing makes investors a lot of money, at least in the short term. But does that make sense?

DSW representative Tüngler said he didn’t think Bayer’s break-up was “feasible nor sensible at this point in time.” “The agricultural division alone would not have a chance because of the billions in lawsuits against Monsanto.” And the pharmaceutical division is “too small and would immediately be a takeover candidate”. The consumer health division with well-known brands like Aspirin is doing well, “but it wouldn’t be the new Porsche either.” And also: Why would you steer a pharmaceutical and biotechnology expert like Anderson from Switzerland to Leverkusen if you ultimately want to dismantle the company? On the contrary, it is very possible that his task will be completely different: to further expand Bayer in the direction of pharmaceuticals and, above all, biotech and to strengthen business in the USA with the help of takeovers. Such a strategy would also be in the interests of the works council, which naturally rejects a break-up.

Bayer should now face lively discussions

The coming weeks and months are likely to be lively, and the dispute between renovators and smashers will pick up speed. Unlike a hedge fund, a supervisory board and a board of directors would have to “keep an eye on the next ten to 20 years, not the next few months,” says Tüngler. A conflict of goals. Everyone can currently agree on one thing in particular: the new boss Bill Anderson.

It took a while for the Baumann era to end. Even when he was the first acting CEO of a Dax group not to be exonerated by the shareholders at the 2019 Annual General Meeting, that showed the direction. In autumn 2020, however, the supervisory board extended Baumann’s contract, which expired at the 2021 Annual General Meeting, until April 30, 2024 – despite the disastrous Monsanto deal. “The Supervisory Board is firmly convinced that Mr. Baumann is the right leader to continue to drive this comprehensive transformation forward in a targeted and decisive manner,” said Supervisory Board Chairman Norbert Winkeljohann at the time.

Baumann, Bayer has now announced, will retire at the end of May. Until then, he will work closely with Anderson to ensure a smooth transition. Does he now regret the 63 billion deal? A few months after buying Monsanto, he sat in a seminar room at the Technical University of Munich and regretted nothing. It’s not about “eating or being eaten,” he said in spring 2019. “You just have to decide what you want.” Baumann had made his decision long ago.