German industrial giant Bayer said yesterday that its healthcare
group had agreed to acquire Topsun Science and Technology's
over-the-counter cough and cold medicine business for 1.072 billion
yuan (US$135.69 million).
Bayer said it would pay another 192 million yuan (US$24.30
million), subject to the fulfilment of certain performance
criteria.
Topsun is one of the largest privately owned pharmaceutical
firms in China. Its brands include White and Black, one of the
leading cough and cold medicines on the Chinese market.
The transaction, which is now subject to the regulatory
approval, will include the transfer of the Gaitianli manufacturing
facility in Qidong, a city in east China's Jiangsu Province, as
well as the sales force and distribution network associated with
the brands.
The transferred employees and assets will become part of Bayer
Healthcare China Ltd and operate within its consumer care
division.
"With this transaction Bayer HealthCare follows its global
strategy to strengthen our over-the-counter business, as well as
our presence in China, one of the fastest-growing over-the-counter
markets," said Bayer Healthcare Chairman Arthur Higgins.
Bayer Healthcare acquired Roche Consumer Health last year,
making it one of the world's top three over-the-counter
businesses.
"The Topsun deal provides us with an entry into the very
important cough and cold category in China. The transaction, which
is expected to close within 2007, will double the size of our
consumer health business in China and puts us within the top 10
over-the-counter companies in this important market," said Gary
Balkema, president of the Bayer Worldwide Consumer Care
Division.
The over-the-counter medicine business is believed to have huge
potential in China.
According to a study of China's pharmaceutical industry issued
in March by global consulting firm PricewaterhouseCoopers, sales of
over-the-counter medicines accounted for less than one-fifth of the
country's pharmaceutical market. But it grew 11.2 percent last year
to US$4.2 billion, making it the fourth-largest over-the-counter
medicine market in the world, as well as the fastest growing of all
major economies.
Bayer Healthcare, with an annual growth rate of 30 percent, is
the fastest growing global pharmaceutical firm in China, according
to US-based market consultancy firm IMS Health.
Commenting on the deal, Topsun Chairman Guo Jiaxue said the
firms "intends to develop its modern Chinese medicine as its core
business."
(China Daily October 26, 2006)