German industrial giant Bayer said yesterday that its healthcare group had agreed to acquire Topsun Science and Technology's over-the-counter cough and cold medicine business for 1.072 billion yuan (US$135.69 million).

Bayer said it would pay another 192 million yuan (US$24.30 million), subject to the fulfilment of certain performance criteria.

Topsun is one of the largest privately owned pharmaceutical firms in China. Its brands include White and Black, one of the leading cough and cold medicines on the Chinese market.

The transaction, which is now subject to the regulatory approval, will include the transfer of the Gaitianli manufacturing facility in Qidong, a city in east China's Jiangsu Province, as well as the sales force and distribution network associated with the brands.

The transferred employees and assets will become part of Bayer Healthcare China Ltd and operate within its consumer care division.

"With this transaction Bayer HealthCare follows its global strategy to strengthen our over-the-counter business, as well as our presence in China, one of the fastest-growing over-the-counter markets," said Bayer Healthcare Chairman Arthur Higgins.

Bayer Healthcare acquired Roche Consumer Health last year, making it one of the world's top three over-the-counter businesses.

"The Topsun deal provides us with an entry into the very important cough and cold category in China. The transaction, which is expected to close within 2007, will double the size of our consumer health business in China and puts us within the top 10 over-the-counter companies in this important market," said Gary Balkema, president of the Bayer Worldwide Consumer Care Division.

The over-the-counter medicine business is believed to have huge potential in China.

According to a study of China's pharmaceutical industry issued in March by global consulting firm PricewaterhouseCoopers, sales of over-the-counter medicines accounted for less than one-fifth of the country's pharmaceutical market. But it grew 11.2 percent last year to US$4.2 billion, making it the fourth-largest over-the-counter medicine market in the world, as well as the fastest growing of all major economies.

Bayer Healthcare, with an annual growth rate of 30 percent, is the fastest growing global pharmaceutical firm in China, according to US-based market consultancy firm IMS Health.

Commenting on the deal, Topsun Chairman Guo Jiaxue said the firms "intends to develop its modern Chinese medicine as its core business."

(China Daily October 26, 2006)