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Elliott Management held talks with private equity groups in recent months to gauge interest in buying Bayer’s consumer health business, as the US hedge fund considered reviving a pressure campaign at the German conglomerate.
The activist’s discussions underscore the issues facing Bayer, with the troubled pharmaceuticals-to-agriculture group in the midst of a complicated turnaround plan under its new chief executive Bill Anderson.
While the buyout groups approached expressed interest in Bayer’s consumer health business, Bayer was unlikely to carve out the unit imminently, said people familiar with the matter. Elliott did not currently own a stake in Bayer, the people added.
Elliott has previously pushed for change at Bayer, confirming in 2019 that it had built a $1bn stake and arguing that the group’s share price did not reflect the value of its separate divisions.
Bayer’s challenges have since grown in complexity, with the group facing billions of dollars in US legal claims related to the health impact of glyphosate, a pesticide ingredient in its Roundup weedkiller. Bayer acquired Roundup in its ill-fated $63bn deal to buy US group Monsanto in 2018. It denies the claims that glyphosate can cause cancer.
Elliott’s discussions came at a time when private equity groups have shown strong interest in consumer health companies. Last year, US buyout group Clayton Dubilier & Rice agreed a €16bn deal to acquire Sanofi’s consumer healthcare business.
Bayer’s over-the-counter consumer health business produces products such as Aspirin, Alka-Seltzer and Claritin. The division in 2024 produced about €5.9bn of sales and nearly €1.3bn of earnings before interest, taxes, depreciation and amortisation.
One person familiar with Bayer’s thinking said that the company was a year into a “massive restructuring”. The German group is introducing a new management model called “dynamic shared ownership”, which shifts decision-making to lower-level employees and is expected to involve removing about half of the company’s managers. “[We] cannot afford to take our eyes off the ball now”, the person added.
Anderson’s plan to turn around the company includes improving its pipeline of new pharmaceutical products, following last year’s expiry of the patent on its blockbuster blood thinner Xarelto.
Anderson has also made boosting the profitability of Bayer’s crop division a priority as it struggles with weak demand in Latin America and cheap competition for plant protection products.
Markus Manns, a portfolio manager at Union Investment which owns a stake in Bayer, said that a carve-out of the consumer health business would be very complex, but could be “value-generating for Bayer shareholders”. It was “incomprehensible that Bayer remains the only major pharmaceutical company still clinging to a conglomerate structure”, he added.
Elliott and Bayer declined to comment.
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