Panasonic Healthcare acquires Bayer Diabetes
Panasonic Healthcare Holdings (PHCHD), based in Tokyo, has inked an agreement to acquire Bayer Diabetes Care (BDC) for $1.2 billion to create a global diabetes care solutions business. BDC is a provider of blood glucose monitoring systems to people with diabetes and healthcare professionals around the world. It was formed as a business unit within Bayer and is present in more than 125 countries. It generated sales of $1 billion in 2014.
PHCHD, which has been backed by funds sponsored by global investment firm KKR since 2014, is a comprehensive healthcare company. It develops and manufactures blood glucose monitoring meters and strips for people with diabetes through the In Vitro Diagnostics business of its subsidiary Panasonic Healthcare (PHC). BDC has marketed and sold PHC products around the world for more than two decades and has been PHC’s exclusive sales and distribution partner for the Contour Next products, as well as some Contour products.
The integration of BDC’s global sales network with PHC’s production capabilities better enables the companies to reach global consumers at a transitional time for the diabetes healthcare sector. According to the World Health Organization, nearly 350 million people live with diabetes globally, up from an estimated 30 million in 1985. The rate of diagnoses is expected to rise, particularly in low- and middle-income countries. To accommodate the rising number of incidence, many country healthcare providers have instituted price reduction programs for diabetes care products. This has contributed to an increase in the volume of diabetes care products in the market at lower prices. To navigate the environment, BDC and PHCHD together look forward to scaling their capabilities to continue providing top-quality and cost-competitive products to patients in need.
The company expects to close the transaction in the first quarter of 2016, subject to customary closing conditions, including relevant antitrust clearance. Further details of the transaction were not disclosed.