Bayer has added to its consumer care division with the acquisition of German herbal remedy company Steigerwald Arzneimittelwerk.
Consumer healthcare is a growth area for Bayer, and the company said earlier this year that it has the ambition to become the world market leader in over-the-counter (OTC) medicines, with targets of €8bn in sales this year rising to €9bn by 2015.
Consumer health accounts for around 20 per cent of Bayer's total turnover, and the group has traditionally relied on a relatively small portfolio of big-name brands in its consumer health portfolio.
Steigerwald fits closely into this mould. The privately-held company specialises in pharmacy-only herbal medicines, and its biggest products are Iberogast for functional gastrointestinal disorders and St John's wort-based Laif for mild-to-moderate depression. All told, Steigerwald had annual revenues of around €61m last year.
"This transaction is further evidence of our commitment to augment organic growth with strategic bolt-on acquisitions," commented Marijn Dekkers, Bayer's chief executive.
"It will allow us to provide consumers with an even broader range of self-care options", he added, noting that Steigerwald also bolsters its presence in Germany and Central and Eastern Europe. Bayer's consumer health division had sales of €3.85bn last year, a rise of around 6 per cent.
Bayer has committed to taking over the contracts of all 180 of Steigerwald's employees, which operate out of a corporate headquarters and manufacturing plant in Darmstadt.
Aside from the brand collateral, Steigerwald also comes with strong intellectual property in the herbal medicine sector, having invested a considerable amount in the last few decades in refining the complex extraction and purification processes needed to manufacture reproducible plant extracts.
The transaction is subject to antitrust clearance and is expected to close at the beginning of July, said Bayer.
Bolt-on acquisitions are a key part of Bayer's growth strategy at the moment, and just last month the group announced a $1.1bn deal to buy birth control specialist Conceptus to boost its speciality healthcare unit.