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Bayer completes takeover of Chinese OTC company

Expands consumer health presence with Dihon purchase
Bayer symbol

Germany's Bayer has completed its acquisition of the China-based consumer healthcare company Dihon Pharmaceutical.

The deal, which was announced in February this year, is the second major expansion of Bayer's growing consumer health business this year following the purchase of Merck & Co's division for $14.2bn in May.

The Dihon deal is valued at considerably less – just €460m – but gives Bayer a strong footing in the fast emerging Chinese healthcare market.

"In conjunction with the recently completed acquisition of Merck consumer care, this acquisition moves us into the leading position in the OTC industry in China,” said Bayer's CEO Marijn Dekkers.

“It also brings a portfolio of well-known consumer brands, which will allow us to provide consumers with an even broader range of self-care options."

Dihon's treatments include a range of over-the-counter (OTC) dermatology products and herbal traditional Chinese medicine for women's health indications.

The company reported revenues of €123m for 2013 with sales mainly coming in Dihon's home market of China. Dihon also has a reach in some emerging markets in Asia and Africa, including NIgera, Vietnam and Cambodia.

The deal will allow Bayer to expand the reach of these products to more established markets in Europe and the US, as well as to tap into the coveted healthcare market in China, which is facing large-scale transformation.

In addition to acquiring several successful products, Bayer will also take control of 2,400 Dihon employees across R&D, manufacturing, sales and marketing, as well as several manufacturing sites in China.

Bayer has the ambition to become the top OTC company in the world, ahead of current market leader Johnson & Johnson, with targets of €8bn in sales this year rising to €9bn by 2015.

Article by
Thomas Meek

3rd November 2014

From: Sales, Healthcare

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