Bayer will restructure

Chemicals and pharmaceuticals group Bayer AG of Germany has announced plans to restructure its businesses. This follows a 10 per cent slide in sales in Jan-Feb 1999. The group is reported to be experiencing the greatest pressure in its pharmaceuticals business.

The restructuring aims to slash annual costs by DM 700 million (about $390 million), or 8 per cent, by the year 2001. The exercise will include pruning older, not-so-profitable drugs, and the closure of some plants worldwide.

Bayer is also under pressure as rival groups have merged to add muscle and reduce costs. Bayer too is now considering merger opportunities in pharmaceuticals. Unfortunately, the mergers that have already taken place have left the German giant with much less choice today than it might have had in the past. It will have to go for smaller companies than some of its rivals have acquired.

One other option being considered is the selling of up to three-fourths of the equity of Agfa-Gevaert, the group's photographic materials subsidiary. This sale may materialise by the end of 1999.