KKR-backed Panasonic Healthcare clinched a deal to buy Bayer's Diabetes Care unit in months of dealmaking that saw sources suggest an offer range of $2.3 billion to $830 million and included a reported bid by China's Sinocare for $1 billion.
In the end, though, Japan-based Panasonic Healthcare paid €1.02 billion ($1.15 billion), Bayer said on Wednesday.
In May, Sinocare, which makes blood-sugar monitors, entered the talks for the unit after 5 months of speculation that saw Panasonic Healthcare paying only $830 million after previous estimates had guessed a sale of up to $2.3 billion. The deal is expected to close in the first quarter of 2016, the companies said in a statement.
The business had been valued at as much as $2.5 billion.
Sinocare has reportedly teamed with Citic Securities and sought financing from China banks to cover the bid, which would have squared with Chinese government goals of becoming a major producer of medical devices and pharmaceuticals as part of new 10-year plan.
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| The Contour blood glucose meter--Courtesy of Bayer |
China and India also have the highest number of diabetes patients in the world.
The sale to Panasonic Healthcare includes the Contour portfolio of blood glucose monitoring meters and strips. Abbott Laboratories ($ABT), Roche ($RHHBY) and Johnson & Johnson ($JNJ) are makers of blood glucose monitoring devices with competition in Asia strong because of growing diabetes diagnostic and treatment efforts.
"We are confident that the sale of our Diabetes Care business to our long-standing partner Panasonic Healthcare, with the strong backing of KKR, will support the long-term sustainability of this portfolio," said Werner Baumann, member of the Board of Management of Bayer AG and CEO of Bayer HealthCare.
KKR bought 80% of Panasonic Corp.'s medical devices business last year, investing in a firm that already had ties to marketing Bayer devices and vice versa. The Bayer diabetes unit bought by Panasonic Healthcare had sales of €909 million last year.
- here's the Bayer release