Bayer picks outsider Anderson as CEO after investor pressure

Roche Pharmaceuticals CEO William “Bill” Anderson speaks during an interview on the sidelines of the 38th Annual JP Morgan Healthcare Conference in San Francisco

BERLIN/FRANKFURT (Reuters) – Bayer replaced its CEO early, recruiting the former head of Roche’s pharmaceuticals business, as investor criticism over the company’s lacklustre share price grew. 

Bill Anderson’s appointment for the top job, which takes effect from June 1, comes after shareholder pressure mounted over recent months to soon remove CEO Werner Baumann, who engineered Bayer’s troubled Monsanto takeover, and find an external successor.

Bayer said the selection process began in mid-2022. Baumann had previously said he would quit at the end of his current term in April 2024.

News of the CEO change sent the German drugs-to-pesticides giant’s shares to their highest level in nearly eight months.

“We welcome the timely change at the top of Bayer and hope that the fresh perspective of an external candidate will provide new momentum for the strategy of the company,” said Ingo Speich, head of sustainability and corporate governance at Deka, a top-20 investor in Bayer.

Markus Manns of Union Investment, among Bayer’s 10 biggest shareholders, said Anderson was a “very good choice” who could provide the relief investors in the company have been waiting for.

Sources told Reuters earlier this week that activist investor Jeff Ubben, who runs fund Inclusive Capital, had contacted fellow investors to drum up support for big changes at Bayer, including the swift replacement of Baumann.

A person familiar with Ubben’s thinking said he welcomed Bayer’s pick in the CEO succession.

Inclusive Capital did not return a call and an email seeking comment.

Anderson will join Bayer as a management board member on April 1, it said, adding that Baumann will work closely with the 56-year-old to ensure a smooth transition before he retires from the drugmaker after 35 years at the end of May.

“Bill has an outstanding track record of building strong product pipelines and turning biotech breakthroughs into products,” Bayer Supervisory Board Chairman Norbert Winkeljohann said in a statement.

Shares in Bayer closed up 6% on the news of the new CEO, reaching the top of Frankfurt’s blue-chip index and hitting their highest level since June last year.

“Bill Anderson’s mission is clear: enable Bayer to realize its full potential and create sustainable value for our shareholders, farmers, patients, consumers, employees, and all stakeholders of the company,” Winkeljohann added.

At Roche, Anderson was instrumental in the Swiss group’s successful years-long campaign to diversify away from Roche’s traditional focus on cancer. Anderson helped to launch new drugs to make up for a decline in revenues from established oncology bestsellers that lost patent protection.

At the helm of Bayer, he will be tasked with getting the litigation risk over weedkiller Roundup under control and review a diversified corporate structure that some investors have said needs to be untangled to boost the share price.

A source close to a large Bayer investor said that Anderson’s appointment augured that a break-up of the maker of drugs, consumer healthcare products, seeds and pesticides could happen.

Baumann was given a new contract in 2020 that runs until 2024 and said at the time he would leave the company when that expires.

Just weeks after becoming chief executive in 2016, Baumann unveiled plans to purchase Monsanto, with the full backing of then-Chairman Werner Wenning, who retired in 2020.

Baumann’s tenure was dominated by U.S. litigation claiming that Monsanto’s Roundup herbicide causes cancer and over environmental pollution related to chemicals known as PCBs, which has cost Bayer billions and roiled shareholders.

(Reporting by Patricia Weiss, Svea Herbst, Kirsti Knolle, Christoph Steitz and Ludwig Burger; Editing by Tom Sims, Alexander Smith and Lisa Shumaker)