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Bayer looks at global lay-offs and divestments post Monsanto acquisition

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.

Cecilia Wilson, Plant Pathology Lab Scientist at Bayer’s Crop Science division, examines strawberry plants (COURTESY: Bayer AG)

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 looks to layoff 12000 and sell businesses after Monsanto deal
Bayer has the fifth largest veterinary medicine unit in the world (COURTESY: Bayer AG)

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.

 

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text

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