Bayer expects its purchase of Topsun Science & Technology's nonprescription cough and cold portfolio to "substantially increase Bayer Consumer Care's presence in China, one of the fastest growing OTC markets in the world," the firm states Oct. 25.

Bayer has agreed to pay Topsun approximately $135.8 mil. (107.3 mil. Chinese Yuan Renminbi as of Oct. 27) for the cough/cold portfolio plus $24.3 mil. in contingent payments "subject to fulfillment of certain performance criteria," according to the companies.

The deal does not include Topsun's modern and traditional Chinese medicine offerings in the category.

Topsun's Western cough/cold portfolio, which includes brands such as White & Black , reported $41.9 mil. in 2005 sales, the firms say.

"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," according to Bayer.

The acquisition of the cough/cold business will include personnel and other assets that will be integrated into Bayer Healthcare China and, upon receiving regulatory approval, will operate within the Consumer Care Division

"I believe one of the reasons why multinational pharmaceuticals were interested in Topsun's Western OTC cough and cold business was due to the leading brand portfolio, effective brand management and extensive sales network," Topsun Chairman Jiaxue Guo said.

To grow Bayer's business in China, assimilating Topsun employees probably will be as important as buying the company's brands. Firms doing business in China must be familiar with regulatory regimes in separate areas of the country (¹ Also see "Success In China Requires Command Of Bureau Power Relations – Panel" - Pink Sheet, 15 May, 2006., p. 6)

Topsun plans to focus on traditional Chinese medicine and modern products including narcotics/psychotropic drugs, the firm states. Its modern medicine enterprise will be developed as Topsun's core business, "with selective focuses on high-end traditional Chinese medicine and narcotics/psychotropic drugs," the firm states.

- Jessica Lake

Bayer Increases Chinese Presence With Topsun Cough/Cold Buy

More from Archive

More from Pink Sheet