LONDON â€" The German pharmaceuticals company Bayer agreed on Tuesday to acquire the nutritional supplements company Schiff Nutrition International for $1.2 billion.
Under the terms of the deal, Bayer is offering shareholders in Schiff Nutrition $34 a share in the vitamins-maker, a 47 percent premium to the company's closing share price on Friday. (Trading in New York was closed on Monday because of Hurricane Sandy.)
The deal is part of the Bayer's efforts to diversify away from its core prescription drug operations into new areas, such as nutritional supplements. Last month, the German drug giant acquired the animal health operations of Teva Pharmaceuticals for $145 million.
“Bayer is committed to augment its organic growth with strategic bolt-on acquisitions,†Bayer's chief executive, Marijn Dekkers, said in a statement. “The Schiff business significantly enhances our presence and position in the United States.â€
Shares in Bayer rose less t han 1 percent in morning trading in Frankfurt.
The German company said it would use Schiff's operations across the United States to expand its own footprint in North America. The American company, based in Salt Lake City, owns a variety of vitamin brands, including MegaRed and Move Free.
Schiff Nutrition reported revenues of $259 million for the 12 months through May 31, according to a company statement. The company's sales are expected to grow by up to 46 percent for this financial year. Schiff Nutrition employs around 400 people in Utah and California.
The U.S. company will be combined with Bayer Healthcare, a subsidiary of Bayer based in Morristown, New Jersey, that reported sales of 17.2 billion euros ($22.2 billion) last year. The division includes Bayer's animal health, consumer care, medical care and pharmaceuticals operations.
Bayer on Tuesday also reported an 18 percent drop in its net income, to 528 million euros, in the third quarter compar ed to the same period last year.
The deal for Schiff Nutrition is expected to close by the end of the year.
