Siemens buys Bayer's diagnostics division

Siemens has signed an agreement with Bayer to acquire its chemical and pharmaceutical company's diagnostics division. The acquisition will enable Siemens Medical Solutions to expand its position in the high-growth molecular diagnostics market.

The purchase price for Bayer Diagnostics, which had sales of ¤1.4 billion and a double-digit margin in fiscal 2005, is roughly ¤4.2 billion. Bayer Diagnostics India sources said more clarity was yet to emerge on the implication of the selloff.

The 51 per cent subsidiary, had in March 2006 posted a total sales of Rs 16.13 crore. Bayer holds 32.67 per cent stake in the company, while Bayer India holds 18.67 per cent equity.

Bayer Diagnostics India, in a notice to the BSE today, said the transaction was expected to be completed in the first half of 2007, subject to regulatory approvals. While Siemens Medical Solutions is one of the key players in the medical analytical and high-end medical scanners market in India.

The acquisition of the Bayer unit will enable the Siemens Group to tap the rapidly growing market for molecular diagnostics based on gene analysis (nucleid acid testing), globally.

Bayer Diagnostics is also a world market-leader in clinical chemistry with a leading position in near-patient testing, laboratory automation and hematology (blood cell diagnostics).

In a release issued by Siemens, its President and CEO Klaus Kleinfeld, said: "Demographic change is greatly increasing global demand for healthcare services and thereby generating excellent growth opportunities for Siemens," adding that the acquisition of Bayer Diagnostics is part of its targeted strategy to create the healthcare industry's first integrated diagnostics company by combining the entire imaging diagnostics, laboratory diagnostics and clinical IT value chain under one roof.

Siemens Medical Solutions is currently one of the world's largest suppliers to the healthcare industry. Employing approximately 33,000 people worldwide and operating in more than 120 countries, Siemens Medical Solutions reported sales of ¤7.6 billion, orders of ¤8.6 billion and Group profit of ¤976 million for fiscal 2005.