February 24, 2016 / 12:37 PM / 4 years ago

UPDATE 1-Bayer names strategy chief Baumann as new CEO

* Baumann to take over as CEO on May 1

* Outgoing CEO Dekkers’ contract to be ended early

* Bankers expect Bayer to seek deals in non-pharma areas (Adds further details, background, banker comment)

By Ludwig Burger

FRANKFURT, Feb 24 (Reuters) - Bayer named Werner Baumann, its head of strategy and a veteran at the drugmaker, as its new chief executive on Wednesday, in a move some industry watchers said could herald more deal-making in the German firm’s non-pharma markets.

Baumann, 53, will replace Marijn Dekkers, 58, on May 1, Bayer said, confirming a Reuters report published last week. Dekkers’ contract had initially been due to run until the end of 2016 but will be ended early.

Baumann, who joined Bayer in 1988, made a name for himself with the successful integration of rival drugmaker Schering in 2006 - at the time Bayer’s biggest-ever takeover - and was a driving force behind the acquisition of Merck & Co’s consumer health unit eight years later.

Investment bankers who know him describe Baumann as introverted and indifferent to executive trappings, but said this should not be confused with a lack of determination.

“Werner Baumann shouldn’t be underestimated. He won’t hesitate to do a deal if it fits,” one of them said.

Some bankers expect Bayer to do more deals in its non-pharma markets, given Baumann’s stated belief in a diversified healthcare strategy, similar to Johnson & Johnson’s.

Challenges loom for 150-year-old Bayer. The planned combination of DuPont and Dow Chemical creates a more formidable rival for Bayer’s pesticides and seeds unit.

In animal health, Bayer is set to become a second-tier player after major consolidation moves in the sector created four clear market leaders.

Baumann spent four years practising for the takeover of Schering, a $22 billion deal that restored aspirin inventor Bayer - at the time struggling with its drugs offering - to its pharmaceutical roots.

He helped develop a blueprint in 2002 to streamline mergers and subsequent integration projects, seeking to eliminate frictions that had hobbled Bayer in the past.

His handling of cutbacks in the integration of Schering while keeping staff motivated proved to be a career-booster for Baumann, who worked in Spain and the United States before returning to headquarters in 2002.

He became finance chief in 2010 before moving to take charge of strategy and portfolio management in 2014.

In the top job, Baumann will also have to show that Bayer’s previous bout of promising drug launches, such as anti-blindness treatment Eylea and stroke prevention pill Xarelto, can be sustained. (Writing by Maria Sheahan; Editing by Christoph Steitz and Mark Potter)

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