The new
Bayer CropScience
subgroup, formed through the merger of Bayer’s Crop Protection
Business Group with Aventis CropScience SA, will begin operating
on June 4, 2002. The industry’s new number two company is thus
being given the green light following a thorough examination by
the antitrust authorities. The European Commission approved the
acquisition in April, and the United States Federal Trade
Commission (FTC) gave the go-ahead on May 30. Closing of the EUR
7.25 billion deal on June 3 marks the biggest acquisition in
Bayer’s history.
"We are pleased to have accomplished this major
acquisition in just half a year. Bayer CropScience will be one
of the pillars of the reorganized Bayer Group," commented Bayer
Management Board Chairman Werner Wenning. "We will be able to
capitalize on our strengths as a leading company in crop
protection, the seed business and biotechnology, as well as in
non-agricultural pest control. We are counting on the
considerable innovative power of the new company, which we
intend to safeguard through suitably high research and
development budgets."
Despite the conditions imposed by the antitrust
authorities, which will mean divesting or outlicensing a sales
volume of between EUR 650 million and EUR 700 million, Bayer
CropScience is one of the industry’s top companies, with
approximately 22,000 employees and sales of roughly EUR 6.5
billion.
Bayer CropScience is divided into five
functions, and its operations are steered via five market
regions – Europe, NAFTA, Cono Sur, Northeast Asia and
International. The classic crop protection business is
complemented by two autonomous business groups: Environmental
Science (which includes professional pest control) and
BioScience, both headquartered in Lyon, France.
"We want to be more than just the sum of the
combined businesses. That’s why we have set ourselves the target
of growing at about 4 percent a year, considerably faster than
the total market. That way we would increase annual sales to
more than EUR 7 billion within the next three to four years,"
explained Dr. Jochen Wulff, Chairman of the Board of Management
of Bayer CropScience. "We have had to reduce our sales forecast
compared to our original plan because we have to meet the
conditions set by the E.U. Commission and the FTC. But we are
holding on to our strategic goal of achieving a 20 percent
return on sales by 2006," Wulff added.
An advantage the new company has in the
competitive environment is its balanced range of
high-performance products covering the entire market spectrum:
Bayer CropScience holds excellent positions both in the classic
agriculture business – including insecticides (number 1),
herbicides (number 3) and fungicides (number 2) – and in terms
of regional presence. Then there are its two additional business
groups: Environmental Science, which combines professional pest
control with the home and garden business, and BioScience, which
comprises the seed and biotechnology businesses.
"With our broad regional base and extensive
technical expertise, we can capitalize on all market
opportunities and be a partner of choice for customers. We now
have the best perspectives for success in an industry that is
already at an advanced stage of consolidation," Wulff pointed
out. With subsidiaries or representations in 122 countries,
Bayer CropScience operates close to the trade and to end users.
This is a key competitive factor, since close contact between
manufacturers and customers brings maximum benefit. That’s why
Bayer CropScience has chosen the launch slogan "Your Partner for
Growth."
In the run-up to today’s closing – the legal
transfer of Aventis CropScience SA to Bayer – 23 mixed teams of
experts and numerous subteams have developed the structures for
the new company. The first decisions regarding corporate
locations have been made, and the managerial staff have been
selected with the aid of external consultants. One-time
integration charges are expected to total EUR 500 million, while
Bayer is aiming for an annual saving through synergies of about
the same amount, which it is hoped will be fully realized by
2005. The top management of Bayer CropScience will introduce
itself to the employees in a number of welcoming events taking
place around the world – from the company’s Monheim, Germany
base through the European headquarters in Lyon, France and the
site in Frankfurt, Germany to the United States, Japan and
Brazil. At these meetings, the management team consisting of
Management Board Chairman Dr. Jochen Wulff and Board members Dr.
Bernward Garthoff (Technology), Dr. Esmail Zirakparvar (Business
Operations) and Willy Scherf (Administration) will also answer
questions concerning the ongoing integration process that will
continue to be a focus of the new company. Also a high priority
are efficient communication with, and continuing support for,
the new company’s customers, for in the future Bayer CropScience
will offer a considerably broader product range and enhanced
problem solutions thanks to its increased wealth of expertise.