Photo: XiXinXing /
27 February 2014Asia

Bayer to buy traditional Chinese medicine group

Bayer has announced that it plans to acquire Dihon Pharmaceutical Group, a Chinese company that makes over-the-counter (OTC) and herbal traditional Chinese medicine (TCM) products.

Kunming-based Dihon makes a range of OTC products for the Chinese market, including dandruff and scalp disorder treatment Kang Wang, and antifungal cream Pi Kang Wang. It also produces TCM Dan E Fu Kang, which is used to treat various conditions that affect women.

In 2013, it recorded $168 million in sales.

Olivier Brandicourt, chief executive of Bayer HealthCare, said that adding Dihon’s OTC brands to Bayer’s portfolio positions the company well for future growth.

“Equally important is the foothold we will gain in TCM, which makes up about half of the OTC segment in China,” he said.

Last July, Bayer bought German company Steigerwald Arzneimittelwerk, which specialises in pharmacy-only herbal medicines.

He continued: “We think we can leverage our recent acquisition of Steigerwald in combination with Dihon’s herbal TCM expertise and pipeline to benefit both these areas, which have a different but related heritage.”

Bayer’s chief executive Marijn Dekkers said: “We are very pleased to have identified a consumer healthcare company in China with such a strong track record of success built by its dedicated employee base.

“This acquisition moves us into a leading position amongst multinationals in the OTC industry in China. It also brings a portfolio of well-known consumer brands, which will allow us to provide consumers with an even broader range of self-care options.”

Chief executive of Dihon, Zhenyu Guo, described self-care as a “critically important” component of healthcare in China.

“We’re pleased to have been able to build a business with brands that bring relief to consumers across China and other parts of the world,” he said.

“We believe that Bayer … is well positioned to take our success to the next level. This acquisition will further strengthen the Yunnan pharmaceutical industry and offers the potential to further expand TCM to other parts of the world.”

Financial details of the deal have not been disclosed. The parties expect the transaction to close in the second half of 2014.

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