Opinion: Bayer and its ability to bounce back
Bayer’s history is checkered by any standards, with lots of ups and downs. But above all, it’s a history of fallingand getting back up again.
Take the events back in 1917 when America entered WWI and the then-US administration confiscated all Bayer’s American property as assets belonging to the enemy. After the war, the firm was auctioned off. The Germans even lost the rights to market the company’s cross-like logo (see picture above).
What followed is Bayer’s darkest chapter in history when it was part of the IG Farben enterprise, a murderous conglomerate of Bayer, BASF and Hoechst that was involved in the Holocaust by supplying poison gas among other things.
Monsanto, of all firms
Taken to pieces by the Allies after WWII, Bayer started from scratch in the US without being allowed to use its old corporate name. But later on everything went back to normal. The company later moved to Leverkusen in West Germany. In the 1990s, it was even allowed to use its original logo again.
Two years ago, Bayer wanted to write corporate history by acquiring US agribusiness behemoth Monsanto — which it did. It spent $66 billion (€59 billion) on the deal, marking the biggest takeover yet of a foreign firm by a German company.
But Monsanto’s image was tainted, to say the least, with its glyphosate-based products found by one WHO research institution to have the potential to cause cancer. Bayer inherited a gigantic wave of lawsuits and has suffered painful defeats in courts.
DW’s business editor Henrik Böhme
Bayer CEO Werner Baumann touted the takeover as the biggest deal of his professional life. But at a 2019 shareholder meeting his report didn’t get the backing of investors. Any consequences? No, nothing happened.
It was like it had always been — Bayer tried to get on its feet again after the fall. And now a large team of lawyers has managed to reach a settlement with US consumers that will cost the firm almost $11 billion.
It’s partly reminiscent of Bayer’s 2001 Lipobay scandal when the firm had to withdraw its cholesterol-lowering drug from the market because of its potentially lethal side effects. Lawsuits back then also threatened the very existence of the company, but at the end of the day the company got away with a settlement involving the payment of $1.1 billion.
Dieselgate lessons
Following the Lipobay dilemma, Bayer underwent some thorough restructuring and cut thousands of jobs. It also sold off parts of its company and acquired new firms. The restructuring and the enormous savings that came with the restructuring put Bayer in a position to take over Monsanto in the first place. But was it really worth it?
Currently a third of all lawsuits are pending, and we’re talking about a huge minefield for Bayer. US groups representing the interest of consumers are known for pulling out the big guns and are not as “peaceful” as their counterparts in Germany. German carmaker Volkswagen knows what I’m talking about. Its emissions-cheating scandal has cost the auto manufacturer some €30 billion in the US — and only €1 billion in Germany.
Of course, the Leverkusen executives are fully aware of this and investors are still not really convinced about the takeover of Monsanto. Following a big jump in Bayer’s stock value after the US settlement became known, shares are in negative territory again.
How will Bayer’s story end? Your guess is as good as mine.
Article source: https://www.dw.com/en/opinion-bayer-and-its-ability-to-bounce-back/a-53940377?maca=en-rss-en-bus-2091-xml-atom