German drugmaker Bayer (Frankfurt:BAYGn) on Thursday announced the divestment of many businesses, about 12,000 layoffs and $3.8 billion in impairments. The Frankfurt-listed giant had bought US-based Monsanto for $63 billion in a deal that closed in 2018.
Hit by the effects of more than 9000 lawsuits against the alleged cancer-inducing Monsanto Roundup weed killer and a deal that was marred with regulatory hurdles, Bayer’s share price had plunged 35% so far in this year. In a bid to lift Bayer back to the road to recovery, Germany’s largest drugmaker is taking measures under the leadership of CEO Werner Baumann.
Measures could also include a possible $1-billion sale of Dr. Scholl’s foot care products and Coppertone sunscreen from its healthcare division that Bayer bought for $14 billion from Merck & Co (MRK) back in 2014.
It could also divest its animal health division — the largest flea and tick control products maker for cats and dogs — for about $8 billion. The veterinary medicine unit is the fifth largest in the world, behind Zoetis (ZTS), Elanco (ELAN), Boehringer Ingelheim and the Merck & Co (MRK) unit.
Bayer’s 60% share in infrastructure management unit Currenta is also up for grabs, and it might go for about $1.7 billion.
Reckitt Benckiser (RB) and Procter & Gamble Co (PG) are likely to be the possible buyers, with Bayer expected to cut about 12,000 jobs in Monsanto as well.
Bayer’s consumer healthcare unit will also take a hit due to impairment costs and falling top-line sales in the US with a shift to online drugstores and cheaper brands.
As November closes, we’ll see how the world markets take this news. Bayer shares had slipped in post-trading session at Frankfurt.
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