Bayer’s new CEO says the company’s management is evaluating whether to spin off its crop science division as part of a company-wide restructuring process.
A German news outlet reported in July that Bill Anderson was considering divesting the company’s agriculture business — one of Bayer’s three divisions, along with Bayer Pharmaceuticals and Bayer Consumer Health — on the stock market.
In a Nov. 8 earnings call with investors, Anderson confirmed a spinoff of Bayer Crop Science is one of several structural changes that are under consideration.
“Beyond maintaining three divisions, the main options would be a separation of either consumer health or crop science, and both of those remain under evaluation,” he said. “We continue to assess them seriously and openly.”
Anderson, who became CEO in June, said Bayer’s management is not happy with the company’s performance this year.
“The status quo is simply not an option for Bayer,” he said. “We share the belief that there’s no quick fix for the multiple challenges that Bayer’s facing. We are committed to the fastest path to value creation, and this is super important.”
Anderson said they’ve established an expert team of external financial advisors to evaluate how to maximize value for shareholders. “We’re not wedded to one structure, and we’re going to pursue the best course to ensure maximum value creation, and fast,” he said.
He noted they have ruled out simultaneously splitting the company into three separate businesses.
Over the past few months Bayer has won multiple court rulings in the ongoing litigation over allegations that glyphosate caused cancer, which the company inherited with its US$63 billion purchase of Monsanto in 2018. Anderson acknowledged the outcome of the lawsuits is a factor when considering any structural changes. “These are all things that we have to take into account.”
Looking ahead, the Crop Science division is planning to launch its Preceon short stature corn in the U.S. next year, which the CEO described as “one of the next really big milestones in all of agriculture.”
In addition to a possible spin-off, Anderson said the company is re-organizing internally, cutting layers of management to shift focus from internal processes to customer needs. The changes will result in a “a significant reduction in the workforce” by the end of 2024, he said.