Bayer cut­ting 12,000 jobs and ex­it­ing an­i­mal health busi­ness

Irish Independent - Farming - - FINANCE -

BAYER AG plans to cut 12,000 jobs and exit its an­i­mal health busi­ness in an ef­fort to re­verse its share price slump since its $63bn takeover of Mon­santo Com­pany.

The cuts, in­clud­ing a sig­nif­i­cant num­ber in Ger­many — where lay­offs are po­lit­i­cally sen­si­tive — rep­re­sent about 10pc of the work­force.

Bayer is un­der mount­ing pres­sure to prove that its new model makes sense. The Mon­santo deal turned it into the world’s largest agri­cul­tural chem­i­cals and seeds maker, but in­vestors re­main un­con­vinced.

Bayer’s mar­ket value has plunged by €30bn since Au­gust when a Cal­i­for­nia jury ruled against its sig­na­ture weed killer Roundup, say­ing it may have caused a school groundskeeper’s can­cer. At least 9,000 other law­suits are pend­ing.

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“[These] de­ci­sions were not made nec­es­sary by the re­cent ac­qui­si­tion, and cer­tainly not by glyphosate lit­i­ga­tion in the US,” said Bayer CEO Werner Bau­mann. “Ab­so­lutely noth­ing to do with it.”

Of the 12,000 job cuts, half will prob­a­bly come from cor­po­rate and sup­port­ing func­tions, while another third will be in crop sci­ence as the Mon­santo in­te­gra­tion pro­ceeds, Bayer said.

An­a­lysts es­ti­mate that Bayer’s an­i­mal health op­er­a­tions are prob­a­bly worth as much as €6.5bn. That unit sells vet prod­ucts for both pets and live­stock, and its best­selling prod­uct line is the Ad­van­tage flea treat­ment for small an­i­mals.

Af­ter the stock fell about 40pc over the past year, Bayer has faced grow­ing ques­tions about how its dis­parate units will re­main com­pet­i­tive.

Bloomberg

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