Executive Briefings

Bayer Calls China 'Wild Card' for Its Consumer Health Business

More than two years after buying Merck's OTC unit and local player Dihon, bringing together three separate consumer care businesses in China remains a challenge, Bayer said.

The company told investors it was experiencing "stronger business disruption than anticipated during the integration of Merck Consumer Care (MCC) and Dihon in China" as it wrestles with lower-than-expected growth for its consumer care business in emerging markets. The drugmaker has previously alluded to the difficulty integrating three separate companies, as well as geopolitical and economic problems in emerging markets--and has referred to China as a "wild card" for its consumer health business.

Bayer didn't go into much detail about the problems it's facing in China, although it's well recognized that cultural differences and unfamiliar business techniques often plague M&A between Chinese and Western companies--and that could be the case with Dihon.

While considerably smaller than Bayer's $14bn MCC buyout, the Dihon takeover was seen as a key platform for Bayer's growth in China, which is one of the target growth markets for Bayer's consumer health division, along with Brazil, Russia and the U.S. 

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The company told investors it was experiencing "stronger business disruption than anticipated during the integration of Merck Consumer Care (MCC) and Dihon in China" as it wrestles with lower-than-expected growth for its consumer care business in emerging markets. The drugmaker has previously alluded to the difficulty integrating three separate companies, as well as geopolitical and economic problems in emerging markets--and has referred to China as a "wild card" for its consumer health business.

Bayer didn't go into much detail about the problems it's facing in China, although it's well recognized that cultural differences and unfamiliar business techniques often plague M&A between Chinese and Western companies--and that could be the case with Dihon.

While considerably smaller than Bayer's $14bn MCC buyout, the Dihon takeover was seen as a key platform for Bayer's growth in China, which is one of the target growth markets for Bayer's consumer health division, along with Brazil, Russia and the U.S. 

Read Full Article