Shareholders of Bayer AG on Thursday gave the German drugmaker a ringing endorsement: they voted in favour of a new business strategy that includes an ambitious push into biotechnology and pharmaceuticals.
The company said it will build a new research centre in San Diego and double its investment in research over the next few years. It also plans to acquire as much as $2 billion in assets outside of Germany, including a handful of small companies.
"We are going to create value for shareholders," Herbert Scheidt, who runs Bayer's European operations, told reporters on Thursday. Bayer also said that he has the right approach and strategy for every business.
Shareholders appear to agree with him. They approved almost all the proposals at their annual meeting by a wide margin, reflecting investor confidence in CEO Werner Baumann's ability to guide the company through what is expected to be one of its toughest periods. Bayer AG, the German drugmaker, is forming a joint venture with China's Changzhou Huahai Pharmaceutical Co., Ltd. to develop and manufacture products based on diclofenac sodium. The deal will also include an option to acquire a 50 percent stake in the Chinese company.
The move is part of Bayer's strategy to grow outside its home market by expanding into fast-growing emerging markets such as China and India, where it could take advantage of low costs and growing demand for medicines. It also comes after Bayer lost market share in developed economies due to competition from generic drugs and the strong dollar against other currencies.
Bayer’s new business is the first major step in its plan to expand beyond its traditional array of crop science products and become a leading provider of health care. The company said it will spend $15 billion over the next five years on research and acquisitions to develop new drugs and diagnostic equipment for patients with chronic diseases like diabetes, cancer, and chronic pain.
The new business is also an attempt to diversify away from Bayer’s traditional focus on agriculture and become a more global company with businesses in chemicals, pharmaceuticals and consumer goods.
The new unit will be led by former GlaxoSmithKline chief executive Andrew Witty, who was named CEO of Bayer last year.
Bayer said it expects the new business to contribute about 12% of earnings before interest, taxes, depreciation and amortisation by 2020. Bayer is a global health care company with a strong focus on innovative, high quality medicine and solutions for the needs of people all over the world.
The Bayer Group is one of the world’s leading producers of agricultural products and active ingredients, as well as a leading supplier of pesticides and crop protection products. The Bayer Group is one of the world's largest research-based pharmaceutical companies with core competencies in the areas of cancer treatment, immunology and hormonal disorders, viruses and cell therapy, and human health care products. In addition to its core businesses, the group has more than 1 million square metres of warehouse space for its own distribution network, which includes almost 3,500 points of sale in every country where it does business. Bayer also has sales offices abroad for Germany-based products.
Most of the businesses and other shareholders are waiting eagerly to look out for the new boss for BAYER’S new business! No doubt, the new business will surely boost its other business which will excite the shareholders more. In an interview Bayer also said that the new boss can be chosen by the voting process also. Till now, it’s not confirmed which voting system will be used or in which manner the new boss will be chosen.
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