Bayer sells assets and cuts jobs as it takes impairment charge
CEO is under pressure to boost share price, dragged lower by concern over lawsuits due to alleged cancer-causing Monsanto weedkiller Roundup
Bayer, the German drugmaker that bought US seed company Monsanto, on Thursday announced the sale of a number of businesses, job cuts affecting 10% of its staff and €3.3bn in impairments.
CE Werner Baumann is under pressure to boost Bayer’s share price after a drop of more than 35% so far in 2018, dragged lower by concern over more than 9,000 lawsuits it faces over an alleged cancer-causing effect of Monsanto weed killer Roundup.
The group is looking into strategic options for product lines Coppertone for sunscreen and Dr Scholl’s for foot care, among the main brands of Merck & Co’s consumer health-care division it bought in 2014 for $14bn.
Bayer will also divest its animal health division, the fifth-biggest player in the industry, which analysts have said could fetch €6bn-€7bn.
It would seek a buyer for its 60% stake in German chemical production site services provider Currenta.
All three possible transactions were previously flagged by Reuters reports.
Under a cost-cutting programme that will also target synergies expected from the $63bn acquisition of Monsanto, Bayer will cut about 12,000 of its 118,200 jobs worldwide.
At the Consumer Health and Pharmaceuticals divisions, Bayer will take about €3.3bn in impairments and write-offs in the fourth quarter.
Consumer Health brands acquired with the Merck & Co and Dihon businesses will account for €2.7bn of that, while about €600m in impairments and write-offs are due to a decision not to utilise a haemophilia drug factory in the German city of Wuppertal and to concentrate production in Berkeley, US.