In the process the pharma heavy will particularly focus on creating a lean US organisation and will shut down operations at its US sites in West Haven, Connecticut and Richmond, California, with the loss of around 800 jobs, primarily in research.
The upheaval is expected to be largely complete by the end of the first half of 2007.
Bayer said that its research programs and activities will soon be confined to three major research and development sites - in Berlin and Wuppertal, Germany and in Berkeley, California.
The firm's diagnostic imaging, oncology and gynecology/andrology research activities will be carried out in Berlin, while Wuppertal will be the new location for the company's cardiology research.
"Both locations have significant capabilities and activities in target discovery, lead generation and optimization, drug metabolism and pharmacokinetics, toxicology and clinical pharmacology," said Bayer.
The Berkeley site will remain as it is, serving as an R&D centre for Bayer's protein-based biologics drug discovery and development activities and home of the Kogenate biological manufacturing facility. In addition it will continue to head up the company's global haematology/cardiology business unit.
"Located in the heart of the world's most active biotech corridor, we expect this facility to become our research centre of excellence and anchor for continuing work in hematology as well as immunology/inflammation," said Marc Rubin, head of Bayer's Research and Development organisation.
Meanwhile, Bayer said it would also still continue operations in Washington State for the manufacture of its white blood cell growth factor, Leukine.
Under the shuffle, Wayne and Montville, New Jersey will become the headquarters for the company's US pharmaceutical commercial operations and Global Oncology and Specialized Therapeutics business units, and home to US-based Global Drug Development groups as well as performing other business support functions.
"The changes in Research and Development will leverage the combined assets of Schering and Bayer to maximize both the output and effectiveness of our global drug discovery and development programs and substantially lower our ongoing infrastructure costs," said Arthur Higgins, chairman of the board of Bayer HealthCare.
"In particular, the changes will unlock opportunity for new drive and focus in the US."