Bayer considers separating from its consumer health or crop sciences divisions, according to new CEO Bill Anderson, who is looking to revive the German company’s share price. In a statement, Bayer said it is looking into separating either the non-prescription medicines business or the agriculture business from the rest of the group, but not at the same time. A sequential split into 3 companies or keeping all 3 divisions are both options, Anderson said. 

In a media call, he explained that initial public share offerings or spin-offs without raising cash were among the possibilities but added that further details would be withheld until a capital markets day next March.

Bayer also unveiled plans to remove several layers of management to accelerate decision-making, resulting in a significant reduction in the workforce. Anderson said that 12 layers of management between him and customers are "simply too much.”

The company said that it expects a "soft growth outlook and continued challenges" to profitability next year. It also expressed confidence in its 2023 financial guidance but said a strong fourth quarter was needed.

Major drugmakers Johnson & Johnson, GSK and Pfizer split off consumer products units in the last 2 years. Last month, Sanofi mapped out a likely separate listing of its consumer healthcare business.

Bayer's agriculture, prescription drugs and consumer health care units accounted for about 50%, 38% and 12% of 2022 group sales, respectively.

Anderson is under pressure to boost shares that have underperformed those of peers, prompting investors to call for various forms of a break-up.

Analysts have said Bayer shares are trading at a massive discount to rivals in agriculture, pharmaceuticals and consumer health activities, partly weighed down by a preference among many financial investors for pure-play companies.

U.S. lawsuits over the alleged carcinogenic effect of its commonly used Roundup weedkiller are another burden on the stock, which before recently was down about 13% this year.

Bayer reported that third-quarter earnings before interest, tax, depreciation and amortization fell 31% to 1.685 billion euros, hit by lower earnings at its crop science division. That compared with analysts' average forecast of 1.725 billion euros.

It made a quarterly net loss of 4.57 billion euros against a profit of 546 million euros a year earlier, hit by impairment charges at the crop science unit due to higher interest rates.


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