Bayer has sold its diabetes care division to distribution partner Panasonic Healthcare for €1.02bn, in keeping with the current trend among pharma companies to offload non-core assets.
The sale covers blood glucose monitoring products such as Contour electronic meters and test strips, as well as other medical devices used to take blood for analysis. Panasonic has been acting as Bayer’s sales and distribution partner for the products for several years.
Sales of the divested products lines were €909m last year, and Panasonic – which is majority-owned by private equity group KKR – says gaining full control will allow it to improve growth rates and streamline distribution channels.
“We are confident that the sale of our diabetes-care business to our longstanding partner Panasonic Healthcare, with the strong backing of KKR, will support the long-term sustainability of this portfolio,” said Bayer board member Werner Baumann.
Bayer’s decision to sell the division ties in with the increasing willingness of big pharma companies to streamline their operations and focus on a smaller portfolio of product categories, and in Bayer’s case zero in on prescription and over-the-counter drugs, as well as crop science products.
The German company has already announced plans to shed its material science operations via an initial public offering (IPO) and has just completed the $14.2bn purchase of Merck & Co’s US OTC unit. Other recent examples in pharma include GlaxoSmithKline and Novartis oncology and vaccines asset swap, and Pfizer’s divestment of its animal health and nutrition units.
It is also an example of the blurring boundaries between life science and technology companies in healthcare, with tech giants such as Nikon, Samsung, Google and Apple ramping up research in healthcare applications and the interface between software, hardware and medicine and drug makers such as Novartis extolling the virtues of embracing ‘digital health’.
The divestment is expected to conclude early next year after the deal goes through antitrust review by regulators.