- Germany-based Bayer is reportedly working with Credit Suisse to sell its $2.5 billion diabetes business. The company is working through private equity channels.
- Bayer is focusing on acquiring other types of life-sciences businesses, including possibly Zoetis, a $22 billion animal-health company that was spun off from Pfizer.
- Other moves that Bayer has already made or is considering in the future: In May, the company purchased Merck's OTC business for $14.2 billion, and currently, Bayer is considering selling off its plastics business.
Diversification is the name of the game when it comes to generating profit and hedging risk. Bayer's diverse portfolio allows CEO Marijn Dekkers to sell off businesses that are no longer aligned with the company's strategy, while looking for new acquisitions that might be. Bayer has not yet bid on Zoetis and is waiting until the company goes up for auction before proceeding further.
Bayer's plan is to use money raised from the diabetes and plastics sales to fund new acquisitions. At the same time, activist investor Bill Ackman, most famous for his aggressive angling with Valeant to take over Allergan, has bought an 8.5% stake in Zoetis, raising the specter of a possible hostile takeover bid. However, Zoetis has adopted a poison pill clause to stave off Ackman while it considers its options.