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?? From dye company to chemical giant
?? From expropriation by the Allies to world leaders
?? 43.55 billion euros in sales
The first years
Today’s Bayer AG was founded on August 1, 1863 in Wuppertal by Friedrich Bayer and Johann Friedrich Weskott under the name of ?? Friedr. Bayer et comp. ?? founded as a general partnership.
Bayer was a dye dealer and Weskott was a master dyer, so the company was founded as a dye manufacturer and distributor. The entrepreneurs used a chemical process that was new at the time to manufacture synthetic colors, which they mainly sold to textile companies.
Between 1863 and 1881 more and more paint factories pushed onto the market, which is why Bayer had to assert itself against strong competition through innovation and perseverance. When this succeeded on the domestic market, the company planned an international expansion, which should be financially made possible through restructuring. Accordingly, the company was incorporated into the Friedr. Bayer & Co. converted, which could now be traded on the stock exchange. At that time, the group already had more than 300 employees.
In the course of the following years, the AG developed into a global chemical group, with paint production initially continuing to function as the main pillar of the company. In the Wuppertal headquarters, in addition to dyes, the first drugs and intermediate products were created during laboratory work.
The creation of the pharmaceutical sector
The company’s pharmaceutical sector was founded in 1888, and over time it became more and more important for Bayer. In 1899 the pioneering pharmaceutical product was created Aspirin, which was developed by the chemist Felix Hoffmann.
As early as 1913, the group was generating around 80 percent of total sales from exports around the world. Subsidiaries in the USA, Russia, France, Belgium and Great Britain employ around 1,000 people at this time.
As early as 1912, the headquarters in Wuppertal proved to be no longer sufficient, whereupon the move to Leverkusen was completed.
During this time, however, the company suffered severe economic blows due to the First World War, exports ceased and subsidiaries were expropriated. Only in 1924 did the financial situation stabilize again after turbulent years.
From 1925 to 1953
In 1925, however, Bayer disappeared from the commercial register. The reason for this was a merger with IG Farbindustrie AG, in the course of which Bayer transferred the entire company assets. Until the Second World War, the Farbindustrie AG pushed for further innovations, but also suffered from the global economic crisis. From 1928 to 1932, thousands of employees had to be laid off.
In 1945, at the end of the Second World War, the British occupying powers took over the IG Leverkusen plant. This was split up by the Allies into twelve companies, which resulted in Bayer AG on December 19, 1951, which received the plants in Leverkusen, Elberfeld, Uerdingen and Dormagen. Two years later, in 1953, the company was again listed on the stock exchange.
The second life of Bayer AG
This point in time was considered the second new beginning for Bayer AG. In the 1950s, the group again acquired shares in foreign subsidiaries in order to win over the economically important export market again. In the course of this, Bayer was transformed into a chemical company in 1957 with the establishment of Erdölchemie GmbH. Research was advanced here and further expansions were carried out, so that in 1963 Bayer had a total of around 80,000 employees and reported sales of 4.7 billion German marks. The period of the economic miracle let Bayer grow continuously until the oil crisis in 1974.
Despite the oil crisis, which was hampering the economy, Bayer took over the US companies Cutter Laboratories Inc. and Miles Laboratories Inc. in 1974 and 1978, thereby securing strategically valuable market positions. At the beginning of the 1980s, Bayer nonetheless suffered from the consequences of the global recession. During this time, the plant and pharmaceutical sector was expanded further until 1988, and the company made investments of 800 million German marks during this period. This resulted in well-known drugs such as Adalat and Ciprobay, which in 1988 contributed to an annual turnover of 40 billion German marks with 165,000 employees. In the same year Bayer AG was listed on the Tokyo stock exchange – as the first German company.
The 1990s and 2000s
In the 1990s Bayer continued to expand, competitors were swallowed up worldwide and thus market positions were secured. In 1994 Bayer bought back the naming rights in the United States and was able to use its own name and conduct business there again. By the early 2000s, Bayer was buying up other companies in the US and around the world.
By 2010, Bayer completed countless takeovers and restructurings. Various drugs were developed, for which the company was honored with research awards. In 2001, the group finally bought the crop protection company Aventis CropScience for 7.25 billion euros, which made Bayer the global market leader in this sector almost overnight. In 2004 the group entered into a partnership with the United Nations and has now supported various environmental programs. The takeover of Roche’s consumer health division followed just a year later. In 2008 Bayer entered into a partnership with the German Cancer Research Center, limited to two years.
2010 until today
The Bayer Group turned 150 in 2013 and celebrated this the following year with various takeovers and partnerships. For example, the Norwegian company Algeta was taken over, as was the consumer care business of the US company Merck & Co.
The CropScience division also acquired assets from DuPont Crop Protection in 2014, giving Bayer another market leader in the agriculture segment in Canada, Mexico, Australia, New Zealand and the United States.
In 2016, the takeover of Monsanto, which was widely discussed in the media, was agreed in writing, which was finally carried out in 2018. This takeover turned out to be a disaster. Bayer has been faced with numerous lawsuits from consumers to this day, alleging that Monsanto drugs have caused cancer, according to plaintiffs. In addition to the damage caused to the public’s reputation, the penalty costs are expected to be in the billions.
Today the group is managed by Werner Baumann and is a divisional company with sales of 43.55 billion euros in 2019, with North America being Bayer’s strongest market with 15.08 billion euros. Overall, a profit of 4.09 billion euros was generated.
With sales of 19.83 billion euros, the CropScience segment was Bayer AG’s largest sector last year, followed by the pharmaceuticals sector with 17.96 billion euros.
In 2020, Bayer AG comprised a total of 420 companies in which the Group held at least 50 percent of the shares. The pharmaceutical giant currently employs just under 104,000 people.
Henry Ely / finanzen.net editors
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