Bayer AG Continues Efforts To Sell Diabetes Device Unit

Bayer AG Continues Efforts To Sell Diabetes Device Unit

November 25, 2014

By Jessica Wilson, Breaking News Staff

Bayer AG is once again shopping its diabetes device business, which could sell for between 1 billion euros and 2 billion euros ($2.5 billion), claimed three people familiar with the situation who asked to remain anonymous, according to Bloomberg. Several private-equity firms, such as Cinven Ltd., EQT Partners AB, KKR & Co. and Triton Advisers Ltd., may bid for the business, the same people said.

Reuters reported in May 2012 that Bayer was holding talks with potential buyers of its diabetes device business, which at the time was valued at 1 billion euros (1.3 billion dollars). According to the Financial Times Deutschland, Panasonic Corp. and French drugmaker Sanofi both expressed interest in the business unit.

By early Jan. 2013, however, then CEO of Bayer Healthcare, Joerg Reinhardt, said in a statement, “We are keeping it.”

“We evaluated different options and we came to the conclusion that we continue to be the best owner,” he said. Reinhardt, however, announced late Jan. 2013 that he would not renew his contract with Bayer when it expired in summer 2013, and he ended his active engagement with the company on Feb. 2013.

Germany-based Bayer AG has tasked Credit Suisse to find potential buyers who would submit bids by early 2015, Reuters reported today.

Bayer AG CEO Marijn Dekkers has expressed his intention to focus on the company’s more profitable life-sciences businesses, which will soon include Merck & Co. ’s over-the-counter drug business. Bayer agreed in May 2014 to buy this business for $14.2 billion.

The blood-glucose meter Contour, which had annual sales of more than 700 million euros in 2013, is included in the diabetes devices unit, which is itself part of the healthcare unit. The diabetes devices unit is considered a peripheral business, as is the company’s plastics unit, which Bayer plans to list on the stock market.

“It probably would be better to concentrate on their growth business, which is the pharma pipeline and the animal-health business,” Ulle Woerner, an analyst at Landesbank Baden-Wuerttemberg in Stuttgart, Germany, was quoted as saying by Bloomberg this morning.

Bayer’s second quarter results highlighted the strength of its life-sciences products. “Our life science businesses, in particular, saw unabated growth momentum,” Dekkers said in a statement when the results were released in July 2014. He continued by saying the company saw “very encouraging sales gains for our recently launched pharmaceutical products and our North and Latin American CropScience business.”

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