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Bayer picks new CEO
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September 14, 2001: 3:46 p.m. ET
But German firm's woes deepen as it embraces go-it-alone stance
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NEW YORK (CNNfn) - The month-long swoon in Bayer AG's share price gathered pace Friday as the market accepted that not even the loss of its most promising drug would make the company change its pharmaceuticals strategy.
Bayer said Thursday its chief financial officer, Werner Wenning, will become chief executive in April and moved to dampen speculation it will sell its drug business despite the fallout in the past month over the costly withdrawal of its Baycol anti-cholesterol treatment.
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German chemical maker Bayer AG picks Werner Wenning (above) to succeed its current CEO, Manfred Schneider. | |
The news dashed hopes that Bayer, stricken after Baycol was linked with 52 deaths around the world, would agree to a joint venture in which it had minority control.
Such a venture would give the Leverkusen, Germany-based company's pharmaceutical unit the critical mass it needs to compete with its 15 or so larger rivals around the world.
Wenning succeeds Manfred Schneider, whose departure was long expected.
Shares of Bayer have lost a third of their value since Aug. 8, including a 4.66 percent drop Friday after a 3 percent drop Thursday.
Hope and disappointment
The disappointment was underscored by a flurry of downgrades Friday, with UBS Warburg lowering its price target to  35 from 41 and Bankgesellschaft cutting Bayer to "hold" from "accumulate."
Lehman Brothers reduced its Bayer rating to "market perform" from "buy."
"We are very disappointed by Bayer's hasty decision to retain pharma as a core business," Lehman analyst Jennifer Barker said in a research note.
"The hastiness of the decision suggests that the management has not been fully objective. Bayer's senior management, including the new CEO-designate, Werner Wenning, many have let their hearts rule their heads," she said.
Bayer argues its "four pillar" strategy combining chemicals, drugs, agrochemicals and polymers reaps synergies, but it also is seen as loath to sell the pharmaceutical operations, which invented aspirin a century ago.
Wenning, 54, has been a Bayer employee since 1966 and management board member since 1997. He is thought more open to change than Schneider, who has been head of the board since 1992 and resisted calls for a breakup.
The drug business had sales of 6.1 billion last year. The firm's health-care operations, which include consumer care and diagnostics, had sales of 10 billion.
Bristol-Myers (BMY: Research, Estimates) and Eli Lilly (LLY: Research, Estimates), Franco-German Aventis and Switzerland's Roche and Novartis all have been named by analysts as possible partners for Bayer's drug unit.
Bankers have played down a newspaper report that Britain's GlaxoSmithKline was poised to bid up to $15 billion for the drug unit, while Roche has denied holding talks with Bayer about buying it.
-- from staff and wire reports 
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