Bayer is selling off its Diabetes Care business to Panasonic Healthcare Holdings, giving the Japanese giant access to blood glucose monitoring systems and lancing devices for people with diabetes.
Backed by investment firm KKR and the Panasonic Corporation, it is set to pay just over €1 billion for the portfolio which had €909 million in sales last year.
The deal is expected to close in the first quarter of 2016, and includes the Contour brand of glucose monitoring meters and strips – the business’ leading product range, launched in 2012 – which are designed for all stages of the disease and various testing frequencies.
Panasonic Healthcare will also pick up the Breeze2, Entrust, Elite and Microlet lancing devices.
The price of the deal is about half what was estimated in some reports earlier this year but Bayer, in common with many other pharma firms, is taking the opportunity of selling off a non-core activity.
“We are pleased that Bayer Diabetes Care chose Panasonic Healthcare and KKR as the trusted partners for bringing the business to its next stage of development,” says Johannes Huth, head of KKR Europe, Africa and Middle East, and Hiro Hirano, chief executive of KKR Japan.
“Together, we will leverage our experience and network to create a global diabetes care solutions powerhouse in an effort to make this a transformational transaction for the diabetes care industry,” they continue.
Werner Baumann, chief executive of Bayer, adds the deal “will support the long-term sustainability of this portfolio”.
Panasonic Healthcare is 80% owned by KKR, and has around 2,300 employees. The Bayer acquisition fits well with its existing areas of interest: in vitro diagnostic devices, medical IT solutions, life science devices and services.
“For more than 20 years, our companies have shared complementary goals,” said Kenji Yamane, president of Panasonic Healthcare. “We anticipate that this partnership will take our two great businesses to new heights, and we wholly welcome the BDC team as full partners to Panasonic Healthcare.”