Bayer restructures, appoints new board members

September 21, 2015

Bayer, following the economic and legal separation of Covestro, formerly Bayer MaterialScience, is realigning its structure as a life science company. Bayer’s supervisory board on Friday approved the reorganization proposed by the board of management to reflect the changes.

As of 1 January 2016, the company’s business will be managed by three divisions: pharmaceuticals, consumer health and crop science. The present structure of a management holding and operational subgroups will be replaced by an integrated organization under the umbrella of the Bayer brand. “The aim of the new organization is to provide the best-possible support to Bayer’s strategy as a leading life science company and to put ourselves in an even stronger position vis-à-vis our competitors. We can achieve this by further improving our innovation strength, sharpening our customer focus and strengthening business process excellence,” said Marijn Dekkers, chairman of Bayer.

In the new organization, the management board will also hold overall responsibility for business operations. For this reason, the supervisory board decided to appoint the heads of the divisions – Dieter Weinand, pharma; Erica Mann, consumer health; and Liam Condon, crop science, to the board of management effective 1 January 2016. On the same date, Hartmut Klusik will also join the board of Bayer as the new labor director and board member/HR, technology and sustainability. He will succeed Michael König, who has asked for his contract not to be extended.

“In recent years, Bayer has continued developing its portfolio with a significant focus on the life sciences. The company’s very strong position at this time enables it to concentrate exclusively on these businesses. The logical conclusion of this is greater integration of the organization,” said Werner Wenning, chairman of the supervisory board. The expanded roles of the management will lead to greater integration of strategic and operational roles.

As part of the reorganization, the Bayer HealthCare subgroup will be dissolved and the radiology business will be combined with the pharmaceuticals division. Consumer Health will comprise the present consumer care division. The Bayer CropScience subgroup will become the crop science division. Animal health will report directly to Liam Condon.

The divisions are to focus on core competencies close to their businesses – research and development, production, and sales & marketing. They will be supported by integrated functions such as HR and procurement, and by global services. Bayer’s existing Technology Services Company will become the engineering & technology function. Bayer business services, the company in which IT and business support services are bundled, will remain a separate legal entity that is to see further expansion. The integration will also be reflected in the Bayer brand. In the future, the company will focus exclusively on the Bayer corporate brand and its product brands. The divisions will not have separate brand identities.

Despite the organizational changes, job numbers are expected to remain stable in the years ahead, both worldwide and in Germany. In a joint declaration issued by management and the employee representatives, key principles relating to the organizational changes have been defined. “We expressly welcome the fact that the subgroups and Bayer Technology Services are being reintegrated under the roof of Bayer AG. Our joint declaration guarantees continued security, trust and motivation for the employees,” said Oliver Zühlke, chairman of the Central Works Council of Bayer AG. “We have also been able to bring about a return to the collective agreement of the German Mining, Chemical and Energy Industrial Union for our colleagues at Bayer Business Services.”

“Our mission of ‘Science For A Better Life’ ideally fits Bayer as a life science company. Ultimately, all activities of Bayer have one and the same goal: improving people’s lives all over the world,” Dekkers said. The challenges are immense. The aim is to provide better medical care and ensure an adequate supply of high-quality food for the growing global population. This can only be achieved with life science innovations. “We have leading positions in attractive and growing markets and our business is diversified and balanced in terms of economic cycles and risks,” he said. Moreover, in light of the many commonalities between the biochemical processes in living organisms, the portfolio also offers interesting opportunities, especially in research.

The future product portfolio of the pharmaceuticals division brings together prescription medicines from the general medicine and specialty pharmaceuticals categories and also the radiology business. The consumer health division will encompass globally known consumer brands from the allergy, analgesic, cardiovascular risk prevention, cough, cold and flu, dermatology, foot care, gastrointestinal, dietary supplement and sun protection categories. The crop science division is active in the seed, chemical and biological crop protection and non-agricultural pest control markets. Animal health provides products and solutions to prevent and treat diseases in companion and farm animals.

Effective 1 January 2016, the board of management of Bayer will comprise eight members headed by chairman Marijn Dekkers, who plans to stand down at the end of 2016. Johannes Dietsch will be responsible for finance; Werner Baumann will oversee strategy and portfolio management; and Kemal Malik will have responsibility for innovation. Hartmut Klusik, currently responsible for product supply on the board of management of Bayer HealthCare, will be the new labor director and board member responsible for HR, technology and sustainability. As part of the reorganization, the board of management areas for innovation and technology will be additionally strengthened. The board will also be enlarged to include the three divisional heads, Weinand, Mann Condon.

By Natasha Alperowicz

Source: Chemical Week