Panasonic Healthcare to Buy Bayer Diabetes Devices Business

Bayer AG (Leverkusen, Germany) is slated to sell its diabetes devices business to Panasonic Healthcare (Osaka, Japan), continuing Bayer’s strategy of selling off peripheral businesses to focus on its core profitable ones.

Bayer has been trying to find a buyer for the faltering diabetes devices business since 2012 as a result of tight public healthcare budgets, increased competition, and reimbursement pressures, but failed to generate sufficient interest from potential suitors at the time. The main product of the Bayer diabetes devices business is the Contour blood glucose meter, which has seen declining sales since 2013, making it the worst performing product of the Bayer during the period.

Bayer also plans to list its Material Science Plastics Unit on the stock market; an initial public offering is reportedly targeted for mid-2016. In May 2014, the company bought the Merck (Darmstadt, Germany) over-the-counter (OTC) drug business for USD 14.2 billion, and the company has also expressed interest in acquisitions in veterinary medicine and crop protection products. The Bayer diabetes device unit is expected to generate between USD 1.1 and 2.3 billion.

“The plans will affect Bayer’s other entities including the HealthCare and CropScience units and its holding and service companies. The reorganization, due to be completed in January 2016, was announced Wednesday in a letter to employees,” said Guenter Forneck, a spokesman for Bayer, in a telephone interview with Bloomberg. “We will be a pure life-sciences company and must organize ourselves as such. No decisions had been made about how the remaining businesses will be affected.”

Entry into the diabetes business would be a new direction for Panasonic Healthcare, whose current focus is on the development, manufacture, and sale of biotechnology products (including cryogenic freezers, refrigerators, incubators, and environmental chambers), in vitro diagnostic devices and services, and medical information technology (IT) solutions.

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