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Feb 27, 2014

Bayer Grows Herbal Medicine Business with Dihon Acquisition

  • Bayer said today it will buy Dihon Pharmaceutical Group, a Chinese-American joint venture that develops over-the-counter and traditional Chinese herbal medicines, for an undisclosed price as part of a strategy by the German pharma-and-chemical conglomerate to become the world’s largest seller of herbal medicines and other OTC treatments.

    The deal is subject to regulatory approvals and expected to close in the second half of this year.

    Dekkers added: "We aim to strengthen our Life Sciences portfolio with strategic bolt-on acquisitions globally. We are very pleased to have identified a consumer healthcare company in China with such a strong track record of success built by its dedicated employee base," Bayer CEO Marijn Dekkers, said in a statement.

    Founded in 1997, Dihon is among China’s top herbal medicine maker whose offerings include Dan E Fu Kang, a traditional Chinese medicine indicated for a variety of women's health indications; and herbal treatments in five specialties: acne, dermatitis, endometriosis, hyperosteogeny, and recurrent oral ulcer. Dihon also has OTC products that include  Kang Wang for dandruff and other scalp disorders; and the antifungal cream Pi Kang Wang.

    Dihon generated sales last year of €123 million (about $168 million) and employs 2,400 people.

    China’s consumer health and wellness market is expected to reach about $70 billion by 2020, Boston Consulting Group concluded in a report released Tuesday.

    Last year, Bayer acquired German-owned herbal medicine maker Steigerwald for an undisclosed price. And Bayer is one of two pharmas cited in news reports as being a potential buyer of Merck & Co.’s consumer healthcare business, along with Novartis.

    Bayer is not alone among pharma giants in looking at the herbal medicines and OTC segments in recent years for additional growth. Sanofi owns its own Chinese herbal medicine maker, BMP Sunstone, having acquired the company in 2010 for $520.6 million. 



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