Bayer to Sell Diagnostics Division to Siemens for $5.3 Billion

Following on the heels of its successful takeover of drug company Schering AG (Berlin, Germany), the Bayer Group (Leverkusen, Germany) has taken a move that will enable still more concentration on pharmaceuticals by announcing plans to sell its diagnostics division to Siemens AG (Munich, Germany) for about U.S.$5.3 billion.

"We are concentrating on pharmaceuticals for both humans and animals, and products that can be promoted directly to patients,” explained Werner Wenning, chairman of the management board at Bayer AG.

The Diabetes Care Division will not be included in the sale nor will the diagnostic imaging business of Schering AG. However, the systems business of the Diagnostics Division, with its emphasis on hardware, information technology (IT) networking, and laboratory equipment, is subject to different success factors, according to Bayer, and therefore will be included in the sale.

"Bayer Healthcare Diagnostics has grown considerably faster than the market in terms of earnings and profitability over the past three years,” said Arthur Higgins, chairman of the board of management of Bayer HealthCare AG. "So now is the right time to divest this successful business and thereby add value for the Bayer Group. Siemens is the ideal company to continue developing Bayer HealthCare Diagnostics as a core business.”

"With this acquisition we are continuing to consistently pursue our strategy of building the industry's first integrated diagnostics company that combines diagnostic imaging, laboratory diagnostics, and clinical information technology under one roof right along the value chain,” observed Erich Reinhardt, CEO and president of Siemens Medical Solutions.

The transaction will also help Bayer to reduce some of the debt incurred for the financing and acquisition of Schering.



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