Bayer to acquire Schiff Nutrition
pharmafile | November 4, 2012 | News story | Sales and Marketing | Bayer, mergers and acquisitions
Bayer HealthCare is to buy US-based vitamins and nutritional supplements firm Schiff Nutrition International for $1.2 billion.
The deal is part of a strategy aimed at allowing the German company to spread its wings further beyond prescription drugs.
“Bayer is committed to augment its organic growth with strategic bolt-on acquisitions,” said Bayer group chief executive Marijn Dekkers. “This transaction represents an excellent strategic fit for our healthcare business.”
Gaining a greater presence in the US, which is the world leader in terms of OTC and nutritional products sales, is highly attractive to Bayer HealthCare.
The company already has an OTC portfolio including Alka-Seltzer Plus, Canesten and Rennie and its consumer care division is based in New Jersey.
The transaction is expected to go through by the end of the year, after which Bayer will also own joint care product Move Free and cardiovascular health brand MegaRed, among a number of others.
Schiff, which has 400 staff at its HQ in Salt Lake City and offices in California, had sales of $259 million last year, and expects sales for 2012-13 to be at least 43% greater.
A significant part of this growth will come from immune support brand Airborne, which was acquired by Schiff in March.
“We will utilise our extensive marketing, sales and distribution expertise to further develop the strong brands we are acquiring,” said Bayer HealthCare chief executive Jörg Reinhardt.
“We will also look to leverage Schiff’s new technology platforms with innovation potential for other Bayer-owned brands and markets globally,” Reinhardt added.
OTC products tend to make less money than prescription drugs, but they are often considered a more stable revenue stream.
Bayer’s contraceptive pill Yasmin has been mired in controversy recently and this has adversely affected the group’s third quarter results, with earnings before interest and tax down 23.7% to €838 million.
Most of a 205 million special charge for the quarter was money set aside against claims that Yasmin caused blood clots.
Having said that, Bayer’s pharma division performed well from June to September 2012, with sales up 6.1% to €2.7 billion.
Adam Hill
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