Informing the Bombay Stock Exchange about the parent company's decision, Bayer Diagnostics India Ltd said the closing of the transaction is expected in the first half of 2007, subject to regulatory approvals.
"The decision is fully in line with our strategy for systematically aligning our healthcare business. We are concentrating on pharmaceuticals for humans and animals and products that can be promoted directly to patients," Bayer AG Chairman Werner Wenning said.
He said Bayer's diagnostics business has grown considerably faster than the market in terms of earnings and profitability
over the past three years and it was the right time to divest the business.
The company said its consumer-influenced diabetes care division will not be affected by the transaction. Similarly, the contrast agents (diagnostic imaging) business of Schering AG, which will form an important part of the future of Bayer Schering Pharma AG, will not be affected, it added.
For Bayer, the after-tax proceeds of the divestment will be about euro3.6 billion. "The effect of this divestment is to substantially reduce our debt, thus helping improve our credit profile," Wenning said.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
