buys Dihon to add traditional Chinese medicine
Send a link to a friend
[February 27, 2014] FRANKFURT
(Reuters) — Bayer said it
would buy privately held Dihon Pharmaceutical Group Co, a maker of
traditional herbal Chinese medicines (TCM), as the German drugmaker
pushes to become the world's largest non-prescription medicines
With China's healthcare spending forecast to nearly
triple to $1 trillion by 2020 from $357 billion in 2011, according
to consulting firm McKinsey, the country is a magnet for makers of
medicines and medical equipment.
Dihon has about 2,400 employees and generated sales of 123 million
euros ($168 million) in 2013, Bayer said on Thursday, declining to
provide the financial terms of the deal.
Dihon's products include dandruff treatments, antifungal creams and
medicine against gynecological conditions such as endometriosis. A
spokeswoman said it was too early to say whether they would be
exported to Germany or Europe.
The deal, which could help Bayer challenge Johnson & Johnson to the
number-one spot in the over-the-counter (OTC)market, underscores its
push into herbal medicine after it bought smaller German supplier
Steigerwald last year.
A number of international healthcare firms have been making inroads
in China. Alliance Boots, the owner of Europe's largest pharmacy
chain, plans to take a 12 percent stake in Chinese distributor
Nanjing Pharmaceutical Co Ltd, while Medtronic Inc purchased China
Kanghui Holdings in 2012.
But doing business in the world's most populous country is not
without risk. China's regulators have been investigating several
foreign and domestic drug companies on suspicion of bribery, with
the most high-profile investigation involving Britain's
[to top of second column]
China's consumer health and wellness market is expect to hit
almost $70 billion by 2020 as increasing numbers of consumers turn
to health supplements and OTC health treatments, according to a
recent report from Boston Consulting Group.
The OTC market alone was worth $18 billion and is estimated to grow
at a rate of around 8 percent per year, the report said.
The Dihon deal is to close in the second half of 2014, Bayer said.
($1 = 0.7317 euros)
(Reporting by Maria Sheahan and Ludwig
Burger; additional reporting by Adam Jourdan in Shanghai; editing by
Victoria Bryan and Tom Pfeiffer)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.