NJ Will Be Bayer's US Headquarters

WAYNE, NJ-Bayer Healthcare has decided to base its US operations at existing company facilities here and in Montville. The decision is part of a reorganization of the company’s operations in the wake of its acquisition, in June, of Schering AG Germany and the subsequent integration with Schering’s US affiliate, Berlex.

The real estate specifics haven’t been announced, but the headquarters consolidation is expected to focus on existing Berlex sites at 6 West Belt Rd. here, and 340 Changebridge Rd. in Montville.

The reorganization plan calls for the closure of Bayer’s existing US locations in West Haven, CT and Richmond, CA, with as many as 350 jobs moving to New Jersey from those locations, and possibly from another location in the Seattle area. The larger reorganization is expected to eliminate 600 jobs in the short term and another 200 later.

“The changes will leverage the combined assets of Schering and Bayer to maximize both the output and effectiveness of our drug discovery and development programs. They also give us the flexibility to substantially lower our ongoing infrastructure costs,” says Arthur Higgins, board chairman of Bayer Healthcare and of Bayer Schering Pharma AG.

“We can now bring together a critical mass of functions into a cohesive US headquarters units,” says Gunnar Riemann, a member of the board of Bayer Schering Pharma.

The move to New Jersey comes with substantial state aid. The New Jersey EDA has approved a Business Employment Incentive Program (BEIP) grant involving a rebate of nearly two-thirds of the amount of state income taxes that Bayer’s transferred staffers will pay. Based on the 350 employees expected to be transferred, the grant is estimated to be worth $12.5 million over the next decade. Prior to the latest grant, Berlex had previously received nearly $5 million in state aid relating to moving and retaining jobs at its two New Jersey locations.

The larger reorganization involves a total of a half-dozen Schering or Bayer locations across the country. According to a statement released by Bayer officials, one-time costs of $350 million will be incurred, of which about $200 million are non-cash. The company expects to cut its overall R&D costs by more than $210 million, and the reorganization is expected to be completed over the next 12 to 18 months.

Bayer’s perhaps better-known consumer products division already has a major presence in the Garden State. The maker of Bayer Aspirin, Alka-Seltzer and Aleve, among other products, has its US headquarters in Morristown.