Dt he is not afraid to jump in at the deep end, Bill Anderson made it clear at his first official appearance as the new Bayer board member. The prospective CEO, who will take office on June 1, tells an anecdote from his time as a manager at Roche in Basel.
Anderson was head of the pharmaceuticals division there for a few years before moving to Leverkusen. At that time, shortly after moving, he went to the Rhine with one of his two sons to swim. The fact that nobody else was in the river surprised him, but didn’t stop him. It was only in the water that he realized how strong the current was. The way back to the safe shore was “a bit difficult,” he says.
Anderson didn’t understand why that was until he told his Swiss colleagues about his experience: Because of the high water, there was a strict ban on bathing that day. Anderson laughs happily as he describes the episode. The man obviously loves danger.
It is precisely this tendency to take risks that in a certain way even unites him with his predecessor Werner Baumann, even if he probably never got into the embarrassment of having to save himself from the floods of the Rhine.
Baumann was even insulted by investors as a “gambler” for taking the risk of taking over the US group Monsanto, which was completed in 2018, for a purchase price of 56 billion euros.
Many shareholders still resent the fact that when he took office in May 2016 he only promised an “evolution” of the strategy – and only a few days later announced the multi-billion dollar takeover.
To date, Bayer is burdened with numerous lawsuits
Investors accuse Baumann of having steered Bayer into the depths of the American judicial system with the acquisition of the controversial manufacturer of seeds and glyphosate-containing crop protection products.
To date, the group has been confronted with numerous lawsuits alleging cancer risks from the Roundup crop protection product, even though it recently won seven lawsuits in a row. However, the uncertainty about the outcome of the open proceedings keeps dragging Bayer shares down like a millstone.
So now Anderson, the fearless, should bring about the longed-for change for the better. The only question is: is he the right candidate – and how much leeway does he actually have for this task?
When you talk about it with larger investors, it quickly becomes clear: Anderson has the blessing of the shareholders for now. The leap of faith is high, also because the newcomer to Bayer’s leadership meets two important criteria: He comes from outside and thus represents a real new start. And thanks to his history as head of pharmaceuticals at Roche, he is no stranger to the capital market.
In fact, the native Texan is only the second CEO in the 160-year history of the Leverkusen group who has not spent his career in the Bayer universe. And only the second after his predecessor Marijn Dekkers, who, as a non-native speaker, has to find his way around in one of the traditional groups of the former Deutschland AG.
The 56-year-old charmingly counters concerns that misunderstandings could arise for this reason alone. At the virtual general meeting at the end of April, he greeted the connected owners with a big smile and in grammatically perfect German.
The new guy crammed hard
He had memorized the short speech intensively in the weeks before. He had even read up on the subject of co-determination, he confessed shortly before his appearance. And if he was irritated by the blunt speech by Deputy Chairman of the Supervisory Board Heike Hausfeld – in her speech she very resolutely emphasized the expectation “that Bayer will remain Bayer at heart” – he didn’t let it show.
In fact, Anderson’s most thorny task in the coming months may be preserving the company’s DNA while meeting the capital market’s desire for tangible change. Which of the many scenarios he is leaning towards – from breaking it up, as some activist investors are calling for it, to spinning off the smallest division, Consumer Health, to retaining the current structure – Anderson has not yet given any indication.
If you ask him about it, he prefers to use the opportunity to talk about what is important to him personally: “Empowerment and ownership”. It’s about getting the employees to take ownership of their tasks and reducing bureaucracy, he then explains.
At Roche it worked to some extent, even if Anderson’s work there was not only crowned with success. Above all, the flop of the Alzheimer’s drug gantenerumab, the development of which Anderson, as head of pharma, had not initiated but had intensively promoted, was a serious setback for the Swiss.
Exactly where the new boss wants to go with Bayer should emerge in the coming months. “Anderson now has a few months to get to know the company and formulate his strategy,” says fund manager Markus Manns from Union Investment.
The fund company is one of the largest German individual shareholders of Bayer. “At the latest when the figures for the fourth quarter are presented, investors will want to know from him where Bayer is headed.”
The list is long
The list of tasks is long: “The group structure has to be reviewed, the drug pipeline has to be strengthened, the pharmaceutical business in the USA has to be expanded and the high level of debt has to be reduced,” says Manns.
It remains to be seen how much leeway the supervisory board gave the newcomer at the top. However, the fund company – like many other long-standing owners – firmly rejects a break-up. Instead, Manns advocates a spin-off of the over-the-counter drug business.
The segment is too small to make a lasting positive contribution to the group result: “Bayer has not yet received the rating on the stock exchange that this business deserves.”
“Bill Anderson should bring Bayer’s share price back up”
It was no surprise that Werner Baumann was replaced, said Oddo BHF’s Oliver Roth when the change was announced. The new boss, Bill Anderson, stands for the improvement in the share price.
Source: WELT/Dietmar Deffner
In general, this is the great hope: that the share price of the once most valuable Dax company could finally move back towards the old highs of over 130 euros from the pre-Monsanto era after the change of boss. When Anderson joined the group on April 1, the share actually rose by around five percent for a short time.
But things have been going down again since the release of disappointing quarterly figures in mid-May. The price is currently around 53 euros. Investors like Manns therefore want two things in particular for the next few months.
Rising prices – and more predictability: “I am convinced that Bill Anderson will risk far less than his predecessor,” says Manns. “As a Bayer boss, you can hardly take any more risks than Baumann.”
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