Bayer Nearing Deal To Sell Diabetes Devices Business
By Jof Enriquez,
Follow me on Twitter @jofenriq
Bayer AG is reportedly close to reaching a deal with U.S. private equity firm to divest its diabetes device business unit.
Citing two anonymous sources with knowledge of the matter, Reuters recently reported that Bayer is in advanced talks with KKR-backed Panasonic Healthcare Holdings over the purchase of Bayer’s Contour blood glucose-meter business.
While talks between the two sides appear to be progressing, a deal may still be weeks away. The Reuters report cites a source with direct knowledge of the talks as saying that KKR had been speaking with Bayer for quite some time, but that “final bids are some weeks off.”
An earlier report last week by Bloomberg said that a deal could be announced as early as Feb. 20, though that date has already come and gone. Bayer’s diabetes unit could fetch between 1 billion and 2 billion euros ($2.3 billion), according to that report.
KKR, Bayer, and Panasonic Healthcare have not commented publicly on the possible transaction.
Bayer tried to divest its diabetes device unit in 2012 but found no takers, sources said at that time, according to Reuters. Buyers were reportedly hesitant to make a deal given tight reimbursement and competitive conditions.
Reports surfaced again late last year that the Bayer was considering a sale of the unit, which was believed to be worth up to $2.5 billion. A possible deal was seen as consistent with Bayer’s plans under new CEO Marijn Dekkers to concentrate on core competencies in the drug development space.
Panasonic Healthcare — which is 80 percent owned by KKR and 20 percent owned by Panasonic Corp. — is seen as a good fit for Bayer’s business due to the firm’s emphasis on personalized healthcare and technology, according to Reuters.
Bayer’s Contour blood glucose-meter business posted sales of 722 million euros ($819 million) in 2013, per the news outlet.
In addition to the diabetes device business, Bayer is also planning to list its plastics business on the stock market to “free up money for investments and acquisitions in healthcare, veterinary drugs and crop protection products,” according to Reuters.