Bayer to acquire Roche Consumer Health
Bayer has agreed to acquire Roche Consumer Health in a deal worth €2.38bn to become one of the world's top three over-the-counter (OTC) consumer health companies. The acquisition includes Roche's 50% share of the 1997 Bayer/Roche joint venture in the US, and five Roche production sites: Grenzach (Germany), Gaillard (France), Pilar (Argentina), Casa-blanca (Morocco) and Jakarta (Indonesia). The OTC business of the Japanese company Chugai, in which Roche has a majority stake, is not included. The acquired business has annual sales of around €1bn.
Assuming approval from the relevant antitrust authorities, the transaction is expected complete by the end of 2004. The synergy potential is estimated at approximately €100-120m, and it is planned to realise these benefits gradually over the next three years. 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.
The combined company will have sales of €2.4bn 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, US. The European headquarters will be in Switzerland in the Basel area. Research and development for the new organisation will be situated at Bayer Consumer Care headquarters in Morristown and at the Roche Consumer Health site in Gaillard, France.
'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. 'By combining the two businesses we can realise significant synergies. Additionally, 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 healthcare market -- one which is characterised by increasing consumer interest in overall health and self-medication. This is a good opportunity for our products.'