Shares of Bayer AG (OTC:BAYRY) dropped more than 2.8% Thursday after reports revealed that the company is expected to postpone the presentation of its break-up plans during an investor update slated for early March.
According to a report by Bloomberg, CEO Bill Anderson is currently prioritizing an internal reorganization, leading to the delay in the preparations for separating Bayer's pharmaceuticals, consumer health, and agriculture units.
This decision comes despite persistent calls from investors over the years, urging the company to end its three-pronged business model, which includes a pharmaceutical division.
Investors contend that separating the divisions would unlock more value. However, the formidable challenge lies in the surge of litigation in the U.S., particularly related to former Monsanto products like the controversial weedkiller Roundup.
With tens of thousands of plaintiffs claiming that Roundup caused their cancer, Bayer, despite pledging up to $16 billion to resolve the lawsuits, has been unable to quell the ongoing legal challenges.
Simultaneously, the crops division is grappling with the impact of declining commodity prices and operational struggles, intensifying the overall pressure on the German company.
Reports suggested that plans for a break-up could still be announced at a future date, but the current focus is on internal trimming measures.