Elliott Management Corp. has built a shareholding in Bayer AG and wants the company to split, Bloomberg News reported, citing people familiar with the matter.
The U.K.-based hedge fund sponsor, headed by billionaire Paul Singer, wants the German company to consider breaking into separate pharmaceutical and agrochemical companies, the people said. Bayer and Elliott have yet to meet regarding the matter.
Elliott has held Bayer shares for over a year, according to the people. Elliott, however, has not yet reached 3% shareholding in Bayer as German law requires investors to reveal their position after they cross the threshold.
Bayer's $62.5 billion acquisition of Monsanto Co. effectively reshaped the company's revenue streams — with crop sciences now sharing the spotlight with the German company's pharmaceutical and consumer health businesses.
Prior to acquiring Monsanto, crop sciences were in the shadow of pharmaceuticals, with Bayer's drug segment representing just under $20 billion of the company's business, according to data compiled by S&P Global Market Intelligence. Following the acquisition, Bayer's crop sciences segment had grown to represent $23.21 billion of its business — now the company's largest source of revenue.
Bayer is now embroiled in lawsuits from about 9,300 plaintiffs in the U.S. accusing Monsanto's weed-killer Roundup of causing cancer, and the company expects the number of lawsuits to rise even further.
The Leverkusen, Germany-based company is also exiting its animal health unit and selling off its consumer health brands Dr. Scholl's and Coppertone, resulting in the loss of 12,000 jobs. Bayer has asserted that the moves are unrelated to the company's $62.5 billion purchase of Monsanto.