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IT never happened to a CEO of a company the DAX the index of the 30 largest German companies listed on the stock market. On April 26, 56% of the shareholders of Bayer, a conglomerate of chemicals, censured Werner Baumann and his management team. Most German bosses can count on nine out of ten shareholders to support them in non-binding confidence votes. In 2015, a rebellion of a minority (39%) of the owners of Deutsche Bank, which censured Anshu Jain and Jürgen Fitschen, led the two co-directors to announce their resignation.
Bayer shareholders are right to mutiny. The share price has fallen by 40% since Monsanto's takeover last June. It is now worth less than the US $ 63 billion paid for the US giant of seeds and chemicals. Critics say Baumann has infected a healthy company with underestimated legal risks related to Roundup, Monsanto's star farmer.
In August, a US court awarded $ 289 million to Dewayne Johnson, a terminally ill cancer patient who has been exposed to Roundup for many years. In March, a similar case was lost when a California court awarded $ 81 million to a cancer victim. It refutes more than 13,000 lawsuits alleging (despite scientific evidence to the contrary) that Roundup is causing tumors. The next verdict is expected later this month. There are rumors that activist investors, including Elliott, a US hedge fund with a stake in the company, want to cut Bayer's farming business away from healthier drugs.
Bayer is not the only major German company to have stumbled after a US mishap. Volkswagen, Europe's largest automaker, has already paid 30 billion euros in fines and compensation in the United States after being surprised to install "defeat devices" in nearly 11 million cars in the United States. the world to deceive the emission tests. He is now trying to reinvent himself as the leading European manufacturer of electric vehicles. The existential problems of Deutsche Bank date back to the acquisition in 1999 of Bankers Trust, a US investment bank, which served as a springboard for its unfortunate incursion into the international investment bank. Daimler, maker of Mercedes cars, has not yet recovered after losing 40 billion euros during the short-term takeover of Chrysler in 1998. ThyssenKrupp, a steelmaker, broke 8 billion euros with two factories in North and South America and is in the process of splitting its former steel manufacturing plant.
Optimists point out the poor state of health of DAX faithful like SAP (software), Allianz (insurance), Munich Re (reinsurance), Siemens (engineering) or BASF (chemicals) – strong companies with healthy balance sheets actively preparing for the digital era. Even Volkswagen seems to have largely put "Dieselgate" behind. Cornelius Baur, the German boss of McKinsey, a consulting firm, attributes some of the problems of German companies to the poor communication strategy of business leaders. Americans evoke sexy subjects, such as technology, when they expose the achievements of their company. According to Baur, on the contrary, Germans tend to pontificate on regulations and taxes.
Perhaps. But even DAX Companies that have avoided the injuries that they have inflicted due to an unknown assault on the US are facing challenges. Most depend on exports. They are affected by the slowdown in the Chinese economy, the tariff wars and the uncertainty surrounding Brexit. Last year, the operating result of DAX businesses decreased by 6.5%. Although the index has been rising since January, in line with other stock markets, this year could be no less difficult for some of them. Automakers and energy companies plan to send many workers on early retirement.
That Bayer's boss will join them will depend on how the legal problems of society in America unfold. The amount allocated to Mr. Johnson was subsequently reduced; Bayer is appealing. On April 30, Moody's credit bureaus reported that Bayer could absorb litigation costs of up to € 5 billion. But they warned that payments of 20 billion euros or more could push the company's rating too close to junk food.
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