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Bayer HealthCare to acquire OTC Business of Sagmel, Inc.


Acquisition strengthens Bayer Consumer Care’s Presence in Eastern Europe

Bayer HealthCare (BHC) announced today that its Consumer Care Division has signed an agreement with US-based Sagmel, Inc. to acquire their over-the-counter (OTC) brand portfolio and related assets. Sagmel, Inc. operates this business in the Commonwealth of Independent States (CIS), including Russia, Belarus, Ukraine and Kazakhstan and other countries in the region and has developed a strong market position. The companies have agreed not to disclose the financial terms of the transaction, which is expected to close during 2008.

This acquisition will substantially increase Bayer Consumer Care’s presence in the CIS, one of the world’s fastest growing OTC markets. The transaction, which is now subject to the necessary regulatory approvals, will include the transfer of the assets related to the acquired brands, as well as the employees dedicated to the Sagmel OTC business including the sales force and distribution networks, marketing, regulatory affairs and supply chain personnel. The transferred employees and assets will become part of the Consumer Care Division of Bayer HealthCare.

Following the establishment of a Bayer Consumer Care organization in the CIS through the integration of the marketing and distribution network of its former partner in January 2007, this acquisition will substantially increase Bayer Consumer Care’s presence in the CIS, one of the world’s fastest growing OTC markets.
“Our consumer health business is a key component of Bayer HealthCare and we will continue to invest in this area in order to ensure further growth,” said Arthur Higgins, Chairman of Bayer HealthCare. “With this acquisition we continue to solidify our leading position in the global OTC market.”

“The combined portfolio of Sagmel, Inc. and Bayer Consumer Care offers a very strong and attractive platform to further strengthen our business in one of the world’s fastest growing regions,” said Gary Balkema, President of Bayer HealthCare’s Consumer Care Division. “The addition of Sagmel’s leading brands will complement our current portfolio in this dynamic market. With the addition of the highly skilled employee group who will join our organization, we expect to deliver outstanding performance.”

Sagmel, Inc. is a privately held OTC company, headquartered in Libertyville, Illinois, USA with an employee base of approximately 1000. The Sagmel portfolio, which delivered estimated net sales of EUR 78 million for twelve months starting October 2006, includes Theraflex, a Glucosamine/Chondroitin supplement for the treatment of osteoarthritis and other joint/bone conditions, Nazol, a decongestant, the hemorrhoid treatment Relief, and nutritional brands Calcemin, Theravit and Jungle, and will allow Bayer to play an even more active role in the OTC arena in the CIS. Increased marketing and selling investments will not only strengthen the acquired brands, but will also have a positive impact on Bayer’s existing OTC portfolio, which includes well-known brands such as Aspirin, Alka-Seltzer, Rennie, Supradyn, Biovital and Elevit.

Commenting on the deal, Anthony S, Melikhov, President of Sagmel, Inc., said “For over fifteen years, we have grown our OTC business in the CIS and provided consumers in this growing market with strong brands to meet their healthcare needs. We believe that this agreement with Bayer will allow the business to expand exponentially and offer benefits to our employees, trade customers and consumers in the Region"


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