Bayer has agreed to acquire Roche Consumer Health. By acquiring this business Bayer will become one of the top three over-the-counter (OTC) consumer health companies worldwide. Additionally, Bayer will acquire Roche's 50 per cent share of the 1997 Bayer/Roche joint venture in the US, (an element not included in Roche's original offering) and five Roche production sites in Grenzach (Germany), Gaillard (France), Pilar (Argentina), Casablanca (Morocco) and Jakarta (Indonesia), a release from Bayer said.
The OTC business of the Japanese company Chugai, in which Roche has a majority stake, is not included. The acquired business has yearly sales of around EUR 1 billion. The EUR 2.380 billion transaction is subject to approval by relevant antitrust authorities.
"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 the Board of Management of Bayer AG. "By combining the two businesses we can realize 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. This is a good opportunity for our products," he added.
Bayer HealthCare's Consumer Care Division and Roche Consumer Health share a heritage of building on their long-standing brands for commercial success. Both have a number of significant analgesic, dermatological, gastrointestinal and nutritional brands that offer outstanding growth potential across the globe. Combined brand equities include such well-known brands as Bayer's Aspirin, Alka-Seltzer, Midol and One-A-Day and Roche's Aleve, Bepanthen, Berocca, Flanax, Redoxon, Rennie, and Supradyn.
Both companies have a strong market presence in Europe and the Americas and the move also builds greater presence for Bayer HealthCare in the growing Asia-Pacific region. "Through this acquisition we intend to leverage the capabilities, reputation, and strong brands of both companies to create a world leading OTC company," said Arthur Higgins, chairman of the Executive Committee of Bayer HealthCare. He added, "The new organization will be uniquely positioned to exploit the growth potential in the OTC-market and emerge as a partner of choice for future Rx/OTC-switches."
Bayer plans to finance the acquisition out of existing facilities. Bayer had liquid assets of EUR 2.6 billion at the end of the first quarter 2004 and thus a sound basis for financing the transaction, the release says.
The combined company will have sales of EUR 2.4 billion and 6,700 employees in 120 countries. It will be headed by Gary Balkema, currently president of Bayer HealthCare's global Consumer Care Division and have its global headquarters in Morristown, New Jersey, USA. The European headquarters will be in Switzerland in the Basel area. Research and development for the new organization will be situated at Bayer Consumer Care headquarters in Morristown and at the Roche Consumer Health site in Gaillard, France.