Bayer inks long-awaited deal to shed its diabetes biz

Bayer CEO Marijn Dekkers

Industry watchers are keeping a close eye on Bayer's big divestment plans, which involve jettisoning its plastics unit before mid-2016. But meanwhile, it's getting a jump on the slim-down process with the sale of its diabetes care business.

The German pharma has inked a pact to send the product lineup--which includes blood glucose monitoring systems and lancing devices--to Panasonic Healthcare Holdings for €1.02 billion, it said Wednesday. It expects the transaction to close in the first quarter of next year.

The deal brings the Leverkeusen-based drugmaker one step closer to being the streamlined, life-science-focused company it hopes to be. After it bids its MaterialScience unit farewell, Bayer will home in on what it does best--HealthCare and CropScience, two businesses that have recently posted promising growth.

But that doesn't mean the company is done making moves--or that it's only selling. Within its HealthCare division, Bayer has two segments that could still use bolstering, consumer health and animal health.

While its OTC business has seen plenty of M&A action recently--Bayer snagged Merck's ($MRK) consumer health unit for $14.2 billion shortly after picking up China's Dihon--it'll need to see more if Bayer wants to make good on its stated goal of becoming the world's No. 1 in that department. It's currently staring down stiff competition from GlaxoSmithKline ($GSK) and Novartis ($NVS), which recently joined forces to form an industry-leading joint venture.

And animal health is an area the company's leaders have long been saying they'd like to beef up, though their recent track record doesn't show it. After missing out on Novartis' veterinary business--which Eli Lilly ($LLY) snapped up--and Schering-Plough's unit, CEO Marijn Dekkers may use some of the extra dough from the plastics divestment to add to his company's lineup.

- read Bayer's release

Special Reports: The top 15 pharma companies by 2014 revenue - Bayer | Pharma's top 10 M&A deals of 2014 - Bayer/Merck Consumer Health | Top 10 animal health companies of 2013 - Bayer Animal Health

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