Bayer to acquire Roche consumer health

- Last updated on GMT

Related tags: Business, Aspirin

Roche is to sell its consumer health business to Germany's Bayer
for €2.38 billion (SF3.6 billion) in cash, the company said today.

The sale, which includes the Swiss firm's leading vitamin and mineral brands Sanatogen and Berocca, will move Bayer Consumer Care into the top three global OTC businesses.

It will give the firm, a unit of the drugs and chemicals giant, a stronger presence in Europe, where it currently makes only a quarter of its OTC sales.

The Roche consumer health business, with annual sales of around €1 billion, is a major player in the vitamin and mineral sector in several European markets. In the UK the company had a 12 per cent share of the VMS market in 2002, second only to Merck's Seven Seas.

It markets a range of blends under the Sanatogen brand as well as ProPlus caffeine tablets to relieve tiredness and stimulate mental activity. Other global brands include Berocca, containing B group vitamins and C to optimize cognitive performance and the Supradyn brand vitamins.

The business has been growing, with sales up 12 per cent last year to around SF1.6 billion. First quarter sales in 2004 were up 5 per cent. The combined OTC businesses of Bayer Consumer Care and Roche Consumer Health will have sales of around €2.4 billion.

"It is our intention to further strengthen Bayer's OTC business to become world leader, and with this acquisition we make another large step towards this goal,"​ said Werner Wenning, chairman of Bayer's board of management.

He added that combining the business would offer good potential for "significant synergies".

"Additionally, the acquired business is of high value - the combined product portfolios are very complementary and contain strong trusted brands. The acquisition also provides growth and attractive profit margins in an interesting and fast developing part of the health care market - one which is characterized by increasing consumer interest in overall health and self-medication,"​ added Wenning.

Bayer​ said it expected a positive impact on results from the deal from 2006 onwards after a negative effect of 0.25 euro on earnings per share in 2005. It said it would finance the deal, which is expected to close by the end of the year, from existing facilities.

The maker of Aspirin will also gain five manufacturing sites in Grenzach (Germany), Gaillard (France), Pilar (Argentina), Casablanca (Morocco) and Jakarta (Indonesia), as well as Roche's 50 per cent stake in a Roche/Bayer joint venture in the US, which markets the analgesic Aleve and some other OTC brands.

The deal does not include the OTC operations of Chugai Pharmaceutical, a Japanese company in which Roche has a majority stake.

Roche chairman and CEO Franz B.Humer said the sale "ensures that Roche's non-prescription brands move to a company with traditionally strong expertise and solid market positions in the non-prescription field".

The deal follows Roche's exit last year from vitamin manufacturing in a sale to Dutch group DSM. It is looking to focus around core businesses pharmaceuticals and diagnostics.

Related topics: Markets & Regulations

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