Bayer sells diagnostic business to Siemens

New Delhi, June 30: Bayer Diagnostics India Ltd will become a part of the Siemens Group, following worldwide sale of the Bayer Group's diagnostic business to Simens AG for a price of 4.2 billion Euros.

The board of Bayer Group today approved the sale of diagnostics division to Munich-based Siemens, Bayer Diagnostics India said.

''This decision is in line with our strategy for systematically aligning our health care business. We are concentrating on pharmaceuticals for both humans and animals, and products that can be promoted directly to patients,'' the company quoted Bayer AG Management Board Chairman Werner Wenning as saying.

Mr Wenning said Bayer is divesting these activities as part of the consolidation phase in the diagnostics market adding that closing of the transaction is expected for the first half of 2007, subject to the approval of the antitrust authorities.

''We think this is the right time to divest this successful business and add value for the Bayer Group. Siemens is the ideal company to continue developing Bayer HealthCare Diagnostics as a core business,'' Bayer HealthCare AG Chairman of the Board of Management Arthur Higgins said.

After the deal, the company may reduce or not launch its planned 1.3 billion euros hybrid bonds. In addition, the previously announced equity raising of up to 4 billion Euros in connection with its Schering business acquisition is now likely to be reduced by 500 million euros.

Bayer had already issued a mandatory convertible bond of 2.3 billion Euros in March.

However, the company's diagnostic imaging business and diabetes care division would not be affected by the transaction. For Bayer, the after-tax proceeds of the divestment will be about 3.6 billion Euros.

This divestment would substantially reduce the company's debt, thus helping to improve its credit profile, Mr Wenning said.

UNI