Bayer to restructure
The Bayer Group has released a financial update for 2014. The company had strengthened its life science businesses HealthCare and CropScience through acquisitions and decided to demerge the MaterialScience business. Dr. Marijn Dekkers, management board chairman, also listed four strategic priorities for Bayer’s successful further development.
First, the company plans to focus on further driving forward the organic growth of HealthCare and CropScience. “We are further increasing our spending for R&D in the life science businesses. This is the condition for future organic growth with new products,” Dekkers said. Overall, Bayer plans to invest more than $4.3 billion in R&D this year.
The second priority listed was the further integration of the consumer care business of Merck & Co., U.S., and Dihon Pharmaceutical, China. With these acquisitions, Bayer has considerably strengthened its non-prescription medicines business and now is the world’s second leading supplier, according to Dekkers.
“Our own very successful brands such as aspirin and Bepanthen have been joined by further well-known names,” Dekkers commented. He said products such as Claritin and Coppertone already are established brands, especially in North America. Bayer now plans to link them as closely as possible to its umbrella brand so as to enhance their sales prospects.
The third area of focus is the demerger of MaterialScience. The planned stock market flotation is targeted for mid-2016 at the latest. The next important step here will be the economic and legal separation of that company. Bayer likely will decide in the second half of the year which of the possible options is to be used for the stock market flotation.
“We are convinced that MaterialScience has outstanding prospects for long-term success as a separate company,” said Dekkers. MaterialScience has a strong global presence and its individual product lines hold either first or second place. In the future, the company will be able to exercise its strength more effectively, faster and more flexibly in the global competitive arena.
Parallel to this process, Bayer’s fourth strategic priority, according to Bayer CEO Dekkers, is to drive forward the complete alignment toward the life science businesses. The group’s corporate structure currently is being examined and restructuring proposals are being developed.
“I must emphasize in this connection that it is not about cutting jobs. We continue to anticipate that the number of employees at Bayer will remain stable in the coming years, both worldwide and in Germany,” Dekkers said.
As a pure life science company, Bayer will be able to optimally deploy its strengths: its competencies in R&D and in marketing, its pipeline, its brands, a diversified portfolio and a presence in the emerging markets.
“At the same time, we will benefit from major similarities in our business model,” Dekkers said, referring to biochemical processes in organisms. As different as people, animals and plants seem to be, molecular mechanisms follow common rules in all life forms. Understanding of these mechanisms has expanded tremendously, as have the possibilities for inventing and producing new molecules, Dekkers said.