Bayer faces more pressure

August 12, 2001 Posted: 1308 GMT

FRANKFURT (Reuters) -- Germany's Bayer AG faced increasing pressure on Sunday over its unexpected withdrawal of a key anti-cholesterol treatment last week, a move which sent its shares crashing.

A Bayer spokesman on Sunday defended the way the decision was announced and the group is due to hold a news conference on Monday at which it is expected to release further details.

But French Health Minister Bernard Kouchner stepped into the controversy at the weekend around what he called Bayer's hasty withdrawal of its Baycol/Lipobay drug.

Kouchner was quoted on Sunday warning of possible "consequences" over the withdrawal which shocked investors and sent the group's share price crashing over 17 percent, wiping almost seven billion euros of its market capitalisation.

The withdrawal of Baycol and subsequent share price plunge forced a rethink at the group -- the inventor of aspirin -- with Bayer hinting at a major shift in strategy by suggesting it might be ready to be a junior partner in a drug joint venture.

Aventis deal in jeopardy?

Further pressure came after the chief executive of rival chemicals group BASF suggested on Sunday that the developments at Bayer might force it to change its mind on a planned seven-billion euros acquisition of Aventis CropScience.

BASF CEO Juergen Stube told German newspaper Welt am Sonntag in an interview that if Bayer changed its mind on acquiring Aventis Cropscience from joint owners Aventis SA and Schering AG , BASF could step in.

"We stand ready if new opportunities arise for us through the developments at Bayer," Strube told the newspaper.

Bayer said on Wednesday it was pulling Baycol/Lipobay with immediate effect across the world because of reports of potentially lethal side effects. U.S. authorities say they have received information linking it to 31 deaths while Bayer said there were five deaths in Germany.

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