Bayer Won’t Sell Drugs Unit; Confirms Naming of CEO

Bayer on Thursday disappointed investors by ruling out the sale of its pharmaceuticals unit and confirmed the appointment of company stalwart Werner Wenning as chief executive, beginning in April.

Europe’s second-biggest chemicals group said its supervisory board approved a plan to set up separate companies to operate its health-care and crop-protection businesses, but made clear its pharmaceuticals business would not be sold.

Bayer, one of Europe’s few surviving pharmaceutical-chemicals hybrids, launched a review of its strategy after the costly withdrawal of its anti-cholesterol drug Baycol last month, which has been linked to some 50 deaths.

Analysts have argued that Bayer would do better by focusing on its chemicals and crop-protection units.

The company said the new structure would make it easier to enter strategic partnerships, but a spokesman said it would not accept a minority stake in any pharmaceuticals joint venture.

Bayer’s stock has tumbled more than 30% since the recall of Baycol on Aug. 8.

Bristol-Myers Squibb Co., Eli Lilly, Aventis, Roche Holding and Novartis have been named by analysts as possible partners for Bayer’s drug unit.

Bankers have played down a newspaper report that Glaxo-SmithKline was poised to bid as much as $15 billion for the drug unit, while Roche has denied holding talks with Bayer about buying the pharmaceuticals business.

The board also appointed Wenning, currently chief financial officer, to succeed CEO Manfred Schneider, who is retiring.

Wenning, 54, is believed to be more open to change, including the possible ending of the four-pillar strategy combining chemicals, drugs, agro-chemicals and polymers, than Schneider.