Bayer to Sell Household Insecticides Unit for $734.4 Million

Drug company Bayer AG, Leverkusen, Germany, agreed to sell its household insecticides and air freshener business to S.C. Johnson & Son Inc. for approximately $734.4 million. The agreement comes less than a month after Bayer signed a letter of intent to sell the household insecticides business to S.C. Johnson, whose brands include insect repellent OFF!, Raid bug spray and Ziploc plastic bags.

The deal will give S.C. Johnson, based in Racine, WI, worldwide rights to such brands as Baygon, Autan, Baclin and Bayfresh, among others. Under the agreement, the company will purchase Bayer’s household insect control and repellent business and other household specialty brands, which had combined sales in 2001 of $405 million. Bayer, however, will retain the active ingredients used in the insecticides and supply them to S.C. Johnson on a nonexclusive basis.

The German drug company said it expects the deal to be cleared by antitrust authorities by the end of the year. All 2,300 employees at the operations will transfer to S.C. Johnson. Bayer plans to use the proceeds of the deal to reduce debt and focus its resources on its core nonprescription health care products, such as aspirin and Alka-Seltzer. The deal is part of a string of sales and partnerships announced by Bayer after the company warned last year that a string of setbacks would cut deeply into earnings.

So far this year, Bayer has sold its company housing units, its interest in Agfa-Gevaert NV, its generics business in France and Spain and its noncore fragrances and flavors business, Haarman & Reimer, for $1.68 billion.

Last month, Bayer’s cropscience division announced plans to sell assets and rights to insecticides Fipronil and Ethiprole as well as several fungicides to BASF for about $1.2 billion.