Siemens to buy Bayer Diagnostics Division

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Siemens is looking to expand it presence in molecular diagnostics through an agreement with Bayer to acquire the chemical and pharmaceutical company's Diagnostics Division. The acquisition, announced last week, will enable Siemens Medical Solutions to expand its position in the high-growth molecular diagnostics market. At the end of April, Siemens announced the planned acquisition of immunodiagnostics vendor Diagnostic Products Corporation (DPC) in the U.S. The purchase price for Bayer HealthCare Diagnostics — which had sales of €1.4 billion ($1.8 billion USD) and a double-digit profit margin in fiscal 2005 — is roughly €4.2 billion ($5.4 billion USD).

"Demographic change is greatly increasing global demand for healthcare services and thereby generating excellent growth opportunities for Siemens," explained Dr. Klaus Kleinfeld, Siemens president and CEO. "The acquisition of Bayer HealthCare Diagnostics is part of our 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." 
   
Dr. Erich R. Reinhardt, member of the Siemens Managing Board and president of Siemens' Medical Solutions Group, commented: "Molecular medicine is becoming increasingly important since it enables healthcare professionals to identify the causes of disease using genetic profiles. With the help of molecular medicine, it will be possible not only to predict the effects of the medications selected and tailor treatment for individual patients, but also to diagnose disease at an early stage. The planned acquisition of DPC has provided us with access to laboratory diagnostics. With the acquisition of Bayer HealthCare Diagnostics, we will now have a comprehensive portfolio in this key future-oriented market. These deals will enable us to considerably expand our range of expertise and further our leading position as a trendsetter in healthcare."
   
The two acquisitions will make Siemens Medical Solutions No. 2 worldwide in immunodiagnostics. In addition, 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). Bayer HealthCare Diagnostics also is a world market-leader in clinical chemistry with a leading position in near-patient testing, laboratory automation and hematology (blood cell diagnostics).
      
In 2005, sales of Bayer HealthCare Diagnostics rose by 8.4 percent to €1.43 billion ($1.82 billion USD). U.S. sales make up about 38 percent of total annual sales, almost even (39 percent) with Euroope. Japan contributes 9 percent, Asia/Pacific represents an 8 percent share and 6 percent is attributed to sales in Latin America/other. The division offers in-vitro diagnostic products for evaluating and monitoring the therapy of numerous diseases, including cardiovascular disorders, kidney diseases, infections, cancer and diabetes. Among the technologies are lab automation, urinalysis, hematology, clinical chemistry, nucleic acid testing, immunodiagnostics and near patient testing. The business, which includes 5,400 employees, is based in Tarrytown, N.Y.