Bayer CEO Resists Full Tri-Split, German Conglomerate Cuts Management Jobs In The Face Of Q3 Loss

Bayer AG BAYRY BAYZF CEO Bill Anderson announced plans to streamline its operations by cutting back on management levels. This decision is expected to lead to considerable reductions in staff. However, Anderson dismissed the possibility of dividing the conglomerate into three separate entities.

"By the end of next year, Bayer will remove multiple layers of management and coordination," he said. Even though this will include a significant reduction in the workforce, it is not a traditional cost-cutting program, Anderson added.

"In terms of structural options, beyond maintaining three divisions, a separation of either Consumer Health or Crop Science remains under evaluation." the CEO said. "We have also taken some options out of consideration. For example, we considered simultaneously splitting the company into three businesses. We're ruling that option out. A three-way split would require a two-step process." 

The Wall Street Journal reported that shareholders such as Bluebell Capital Partners had been calling for Bayer to split into three businesses—crop science, consumer health, and pharmaceuticals—saying the divisions had nothing to do with each other.

Bayer's Q3 sales fell 8.3% to €10.34 billion. Bayer's crop science business recorded a 7% contraction in sales to €4.37 billion. 

Sales at its pharmaceuticals division fell 8.4% to €4.54 billion, while the consumer health business contributed €1.41 billion in sales, down 8.9% on year.

Bayer posted a Q3 net loss of €4.57 billion compared with a profit of €546 million a year ago.

EBITDA plunged 31% to €1.69 billion. Core earnings per share slumped 66% to €0.38 from €1.13.

Bayer expects a soft growth outlook and continued challenges to the company's profitability for next year.

Price Action: BAYRY shares were down 1.25 to $11.08 at the time of publication Wednesday.

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