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KEYCODE BAYER #38

Dr. Korinna Horta, Environmental Defense,USA

Impressions from Bayer Shareholder meeting - Cologne - April 27, 2001

About 7,300 shareholders attended the meeting ranging from retirees with a couple of shares and plenty of time to spare to institutional investors such as Deutsche Bank. I was able to enter the meeting hall and register as a speaker thanks to an entry permit for shareholders which the German group Coalition against BAYER-Dangers had passed on to us. Security was very tight, i.e. I was not allowed to take extra press packages with me into the building. Large video screens spread out over several halls made sure that everyone could follow the proceedings. In the plenary hall, members of the Board and senior management of Bayer were on a stage and the first couple of hours were taken up by the CEO, Manfred Schneider, presenting a glowing picture of Bayer's financial health. This was followed by shareholders' being called to the podium to speak.

Environmental Defense was one of about 45 shareholders registered to speak. It was clear that much of what went on was staged. Many of the "shareholders" did nothing but praise the heroic deeds of management. Others, especially institutional investors, raised substantive issues - such as possible break-up of the company, need for more flexibility of labor market and the like. Development of the U.S. economy was clearly on the mind of institutional investors because it would have an impact on Bayer earnings.

The "critical shareholders" got the worst slots to speak, basically only at the end of the day. Amongst the critical shareholders were people speaking about compensation for slave labor, pesticides in developing countries, Bayer antibotics in U.K., Bayer financing of Congo war, etc.. The critical shareholders were treated in a condescending fashion and frequently interrupted.

During my presentation, I got through most of our text when the chair called on me to "get to your questions quickly - we know all about antibiotic resistance." Twice I had to interrupt the presentation and convince them that I needed to go on speaking (the shareholders heaping praise on management could speak for 20 minutes without interruption). Once I told the audience that as a Bayer listing on Wall Street is planned for September they might want to know about public concerns about Bayer in the U.S. and just continued to speaking. Altogether it took about 5 minutes, i.e. well within the requested timeframe.

Bayer CEO Schneider gave his responses after a block of 15 shareholders had spoken. He responded to each speaker individually although with regards to the critical shareholders, he would say things like "You have told us nothing new", "we cannot discuss technical questions of pesticides" etc. On our subject, he responded: "You must know that our negotiations with the FDA have not yet reached a conclusion. The FDA has not forbidden the use of Baytril and the FDA is one of the best government oversight agencies in the world. In addition, you did not state that Baytril is only used for therapeutic use." (Note: We had discussed the therapeutic use - but as a matter of fact it is not in our statement.)

This was perhaps one of the most substantive response any of the critical shareholders got. I think the points he made can help us reformulate the text for future use so that we can pre-empt his arguments designed to calm institutional investors. I think it was excellent that we had the chance to participate. The U.S. is the most important market for many of the European companies... they are scared of what happens in the U.S. Bayer's listing on Wall Street is planned for September 26, 2001 - this might provide us with a good opportunity!