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Elliott Management has held consultations with Private Equity Groups over the past few months to assess Bayer’s interest in purchasing consumer health businesses as US hedge funds considered reviving the pressure campaign at German conglomerates.
Activist debates highlight the problems Bayer is facing, with the troubled drug-to-agriculture group in the midst of a complicated turnaround plan under new CEO Bill Anderson.
The buyout group has approached, but has shown interest in Bayer’s consumer health business, but it’s unlikely that Bayer will immediately open up the unit, people familiar with the issue said. Elliott currently did not own Bayer’s shares, people added.
Elliott previously has been seeking change in Bayer, confirming that it built $1 billion in stock in 2019, claiming that the group’s stock price does not reflect the value of separate divisions.
The Bayer challenges have since been complicated, with the group facing billions of US legal claims related to the health effects of glyphosate, a pesticide ingredient in Roundup herbicides. Bayer acquired a roundup in a 2018 unfortunate $63 billion deal to buy US group Monsanto. It denies claims that glyphosate can cause cancer.
Elliott’s discussion took place when the private equity group showed strong interest in consumer health companies. Last year, US acquisition group Clayton Dubilier & Rice agreed to a 16 billion euro deal to acquire Sanofi’s consumer health business.
Bayer’s over-the-counter consumer health business produces products such as aspirin, alcaserzer and claritin. In 2024, the division generated sales of approximately €5.9 billion and earned approximately €1.3 billion before interest, tax, depreciation and amortization.
One person familiar with Bayer’s ideas said the company had been in a “massive restructuring” for a year. The German group is introducing a new management model called “dynamic shared ownership.” This is expected to shift decision-making to lower-level employees and remove about half of the company’s managers. “(We) can’t afford to let our eyes go off the ball right now,” the person added.
Anderson’s plans to turn the company around include improving its new drug pipeline following the expiration date of last year’s blockbuster blood thin nelto patent.
Anderson also became a priority as Bayer’s crop sector increased profitability and suffered from weak demand in Latin America and cheap competition for plant protection products.
Markus Manns, portfolio manager at Union Investments, which owns Bayer’s shares, said that while sculptures for consumer health businesses are extremely complicated, it could “have value for Bayer’s shareholders.” “I couldn’t understand that Bayer is still the only major pharmaceutical company that clings to the conglomerate structure,” he added.
Elliott and Bayer declined to comment.
