Siemens acquires Bayer Diagnostics, Creates Integrated Diagnostics Powerhouse

An ounce of prevention is worth….$7 billion, which is what Siemens AG , the number two player in diagnostic imaging, has offered to become the number three player in in vitro diagnostics. Following upon its announcement in May that it would pay $1.86 billion for Diagnostics Products Corp., to bring an immunodiagnostics business in-house, [See Deal] Siemens announced in June that it will acquire Bayer Diagnostics for approximately €4.2 billion or $5.26 billion. [See Deal] Siemens thus catapults itself to the number two spot in the immunodiagnostics segment of IVD, after Roche , and by its calculations, now plays a close third to Abbott Laboratories Inc. in the overall in vitro diagnostics (IVD) market, excluding the diabetes self testing segment, in which Siemens doesn't operate.

Not only do the IVD acquisitions represent a new source of recurring revenues from diagnostic test and reagents to a company traditionally operating in capital equipment segments, the in vitro diagnostics segment represents an important growth market going forward, and one that suits Siemens' mantra of "quality up and cost down" in health care, president and CEO Klaus Kleinfeld explained in a conference call following the announcement