Bayer announced its plans to slash 12,000 jobs from its global workforce and sell a few business segments after being punished by Wall Street over its $63 billion takeover of Monsanto, which came with a flood of lawsuits.
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The German chemical and pharmaceutical group’s shares have dropped by more than a third since acquiring the weed-and-seed maker in June. Two months following the close of the deal, Monsanto was found guilty in a personal injury lawsuit and ordered to pay $250 million to a groundskeeper for failing to warn a groundskeeper that its weedkiller Roundup might cause cancer.
While the damages were later reduced to $39 million, the verdict ignited a barrage of similar lawsuits. At least 9,000 are currently pending. What’s more, since the verdict, the company has lost more than $34.1 billion in market value.
On Thursday, Bayer said it plans to make the jobs cuts by the end of 2021 and a significant number of the reductions will be made in its home market of Germany. More than 4,000 of the jobs will likely go at the company’s crop sciences division to make way for Monsanto’s team.
In addition to the jobs, the company said it is also looking to sell its consumer sun-care and foot-care segments, Coppertone and Dr. Scholl’s, which will help give its core pharma and agricultural businesses a boost.
Bayer will also divest its animal health division, the No. 5 player in the industry, which analysts have said could fetch $7.94 billion, according to Reuters, and sell its 60 percent stake in Currenta, a company that provides services to chemical companies.
In a statement to FOX Business, Bayer reiterated that it is making these moves to “enhance performance, productivity and innovation, and improve competitiveness,” and it firmly stands by its commitments that it has made in the U.S.
Those include spending approximately $16 billion for R&D in agriculture over the next six years -- with at least half of this investment ($8 billion) made in the United States – as a result of our Monsanto acquisition, the company said.
“In total, we have invested close to $80 billion in this country over the last several years. We believe that the United States is the best country in the world for innovation,” Bayer said.