(Adds timing on strategy update in paragraph 6, background on new CEO from paragraph 12, background on industry in last two paragraphs)

LONDON, Aug 25 (Reuters) - Bayer is a "conglomerate" that needs to make major changes including "de-merging" two of its three business arms, investor Artisan Partners told Reuters on Friday, as pressure mounts on the German group's new CEO to bolster weak shares.

Artisan wants the drugs-to-pesticides company to find new owners for its over-the-counter and pharmaceutical units, it said.

"Recently we wrote a letter to the conglomerate Bayer -- and it is a conglomerate," David Samra, founding portfolio manager of Artisan's International Value team, said in an interview.

Bayer has a "whole host of problems" including "too much debt," Samra said.

Bayer's new CEO Bill Anderson said this month he is not ruling out any options as part of his review of the diversified company’s strategy and structure, "leaving no stone unturned".

He added he would provide an initial update in the coming months and detailed plans in early 2024.

Before taking the top job in June, Anderson said he was keeping an open mind on whether to break up the company, as some investors have demanded, saying other investors opposed it.

Artisan is Bayer's sixteenth biggest investor, according to Refinitiv data. It did not disclose the size of its stake.

We suggested "that they cut the dividend to zero because they need the capital to effectively operate and reinvest back in their business," Samra said, adding that the letter was sent prior to Bayer's earnings results announcement on August 8.

"Then in their earnings release, the company specifically came out and said they're committed to their dividend which is the exact opposite of what they should be doing in the long term best interest of their business."

Bayer declined to comment.

Anderson, brought over from Swiss rival Roche, had a testing first few months at the helm, weighed down by U.S. lawsuits claiming Bayer's weed-killer Roundup causes cancer and facing pressure from investors demanding major change.

The German company


in an unscheduled statement last month that it was projecting a steeper fall in earnings, zero free cash flow and asset write-downs this year, in what some analysts suggested was Anderson seeking to get bad news out quickly to allow for a fresh start.

Samra said that though the chairman of Bayer's supervisory board, Norbert Winkeljohann, has not directly written a letter back to Artisan, they have "been in contact" with the company.

Samra said Artisan "has not suggested specifically how (Bayer) should restructure their business" in the letter.

He said in the interview that only Bayer's Crop Science unit was "properly scaled" with "long-term advantages", while it's over-the-counter health products and pharmaceuticals units are "sub-scale", low-margin and "probably more valuable in the hands of somebody else".

The farming seed and pesticides division Crop Science, the second largest global supplier in the industry after China's Syngenta, accounts for about half of Bayer's sales.

Large pharma player have spun off non-prescription drug businesses over the last year, with Johnson & Johnson listing Kenvue, and GSK listing Haleon in 2022.

(Additional reporting by Ludwig Burger; Editing by Matt Scuffham and Diane Craft)