and people, and spun off the company’s
material science business. Baumann
helped oversee the multibillion-dollar
takeover of Berlin-based Schering AG
and, after becoming Bayer’s chief finan-
cial officer, the purchase of the consumer
health division of Merck & Co.
By 2016, Bayer was facing a quandary.
The blockbuster cardiovascular and eye-
care drugs that lifted it to record valua-
tions had less than a decade left of patent
protection, and the pipeline for new
medicines was drying up. Meanwhile,
its agriculture division was facing height-
ened competition because of consolida-
tion within the industry. Dow Chemical
Co. had recently paired up with DuPont
Co., and China National Chemical Corp.
had swooped in for Switzerland’s Syngenta AG.
Within Bayer, some worried that a foreign entity might
orchestrate a hostile takeover and split up the empire. To
strengthen the company’s portfolio, Baumann began contem-
plating buying Monsanto—a possibility he’d been researching
since at least 2011. His superior, Dekkers, was widely reported
to be against the move. But Baumann had an unusual amount
of clout and the backing of his mentor, Werner Wenning, a
lion of German industry who was Bayer’s CEO in the 2000s
and has chaired the supervisory board of directors since 2012.
Together, “Big Werner” and “Little Werner,” as the duo are
often called, concluded that acquiring Monsanto made sense.
Bayer had long specialized in chemicals used by farmers to
fight fungus, weeds, and insects, but it lacked a first-rate seed
business. Monsanto had dominated the seeds sector ever since
it revolutionized the industry in the 1990s by introducing corn,
soybean, and cotton seeds genetically modified to withstand
glyphosate, the active ingredient in Roundup.
Buttoned-up in style and manner and extremely soft-
spoken, Baumann doesn’t seem the type to relish wading into
the cultural wars surrounding Monsanto. He grew up on a
working-class street in western Germany in the city of Krefeld,
about an hour’s drive north of Leverkusen, where his par-
ents ran a bakery on the ground floor of the building where
the family lived. He studied economics at the University of
Cologne, thinking he’d become a tax auditor, accountant, or
consultant. Instead he landed a job with Bayer in 1988 and
never left. Over his three-decade climb, serving stints in the
U.S., Spain, and Germany, he impressed bosses—none more
important than Wenning—with his willingness to work endless
hours and his ability to master complicated subjects.
But Baumann has been criticized for lacking emotional
intelligence, and some say this shortcoming may have affected
his judgment concerning Monsanto. “Figures are true or
false, good or bad,” says Marc Tüngler, managing director
of DSW, a German association that advises small and insti-
tutional investors. “With Monsanto, it’s not just about goodor bad figures. It’s about taking risks, it’s
about empathy, it’s about communication
and explaining.”
Just weeks before assuming Bayer’s
top post, Baumann assured investors and
journalists that he had no plan for doing
anything “revolutionary.” So it came as a
shock when, half a month into his tenure,
news leaked that he’d proposed the larg-
est corporate takeover in German history.
Shares immediately plummeted 9%. “We
went to bed as pharma shareholders and
woke up with glyphosate,” says Christian
Strenger, a corporate governance expert
and Bayer shareholder.
Bayer employees were also rattled. On
a company webcast held days after the
news broke, several demanded to know
whether Bayer could afford the takeover, whether the move
would detract from necessary investments in the pharmaceuti-
cals division, and whether Monsanto’s toxic image would sully
the name of their revered employer. Baumann said there was
nothing to worry about, telling the employees that though
Monsanto might be unpopular in Europe, where genetically
modified organisms are largely banned, its reputation over-
seas was different. “In the U.S.,” he said, “Monsanto is a very,
very reputable company.”B
y the time Bayer reached a takeover agreement in
September 2016, 120 non-Hodgkin lymphoma law-
suits had been filed against Monsanto. That didn’t
overly concern Baumann. He was less interested in Roundup
than in the U.S. company’s GMOs and digital farming opera-
tions, which deploy satellites, drones, infrared imaging, and
GPS-controlled tractors to help farmers make better planting
decisions. That said, Monsanto’s weed-killing business, which
earned $3.7 billion in 2017, was an attractive enough revenue
source that Bayer complied with antitrust regulators by selling
its own flagship herbicide, called Liberty, and most of its seed
business to German rival BASF SE for $7 billion.
Patented by Monsanto in the early 1970s, glyphosate has
been called the Holy Grail of herbicides for its efficiency at
killing weeds and expanding harvests. After Monsanto intro-
duced its glyphosate-resistant Roundup Ready seeds in 1996,
glyphosate use soared fifteenfold. By 2014 farmers were spray-
ing almost 1 pound of it on every acre of cropland in the U.S.
and almost half a pound on every acre worldwide.
Before the acquisition, Monsanto claimed on a website that
glyphosate is “about half as toxic as table salt and more than
10 times less toxic than caffeine.” The compound has won
repeated approval from regulatory agencies around the world,
including in Australia, Canada, the European Union, Japan, and
the U.S. Many farmers view glyphosate as crucial to affordably
feeding a growing population on a rapidly warming planet.
Still, there were plenty of red flags. In March 2015 the59Bloomberg Businessweek September 23, 2019PREVIOUS SPREAD: GENE GLOVER; THIS PAGE: PHOTOGRAPH BY JESSICA CHOU FOR BLOOMBERG BUSINESSWEEK
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