) recently announced that it will not go ahead with its proposed
acquisition of nutritional supplement company
Schiff Nutrition International, Inc.
). Bayer had announced in October 2012 that it has inked a
deal to buy Schiff Nutrition for $1.2 billion or $34.00 per share
in cash. The agreement permitted Schiff Nutrition to review and
accept an unsolicited offer within 30 days of inking the deal
Schiff Nutrition subsequently accepted the higher offer of the UK
based consumer goods company
Reckitt Benckiser Group plc
). The consumer goods company inked a deal, earlier in the month,
to buy Schiff Nutrition for $1.4 billion or $42.00 per share.
Management at Bayer stated that it still believes that had its
proposed acquisition of Schiff Nutrition gone through it would
have been a significant addition to the German company's Consumer
Care business. However, Bayer decided not to compromise on its
offer and refused to enter into a bidding war with the UK based
company as it was likely to result in an offer price above
Bayer's acceptable range.
Following the termination of the deal, Bayer received $22 million
from Schiff Nutrition. Even though Bayer's deal with Schiff
Nutrition fell through, the former announced that it will not
alter its policy of growth by acquisition.
We note that Bayer has been quite active on the acquisition front
lately. In August 2012, the CropScience unit of Bayer acquired
AgraQuest, Inc, formerly a global supplier of innovative
biological pest management solutions. The acquisition has boosted
Bayer's fruits and vegetables business while building a strong
technology platform based on "green" products.
Moreover, the decision of the HealthCare unit of Bayer to acquire
Teva Pharmaceutical Industries Ltd.
) animal health unit in the US is an encouraging move. The
inclusion of Teva's US animal health unit will not only add
reproductive hormones to Bayer's product portfolio, but also
provide multiple anti-infective solutions for treating infections
in livestock to Bayer's food animal unit. Following the
completion of the deal in 2013, Bayer's companion animal unit
will boast of dermatological, pet wellness and nutraceutical
We have an Outperform recommendation on Bayer. The stock carries
a Zacks #2 Rank (Buy rating) in the short run.
BAYER A G -ADR (BAYRY): Free Stock Analysis
(RBGPY): ETF Research Reports
SCHIFF NUTRITN (SHF): Free Stock Analysis
TEVA PHARM ADR (TEVA): Free Stock Analysis
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