Bayer’s Acquisition Stratogy In China

In recent years, multinational pharmaceutical companies are facing patent expires, competition from the generic is becoming more and more intense, so many multinational pharmaceutical companies choose M & A as their development strategy in international competition, and the international pharmaceutical industry has entered a consolidation phase. Chinese pharmaceutical market has great potential, but its system is in the process of reform and its regulatory is more stringent. Therefore, the development of the multinational pharmaceutical companies in China’s must adapt to the turbulent environment so that they can optimize the allocation of resources, enhance corporate value, and promote the healthy development of the pharmaceutical industry.Bayer is one of the world’s top 500 enterprises, and also is the world’s leading multinational pharmaceutical companies. In 2006, Bayer acquired TOPSUN to enter Chinese OTC market. In 2014, Bayer acquired DIHON to consolidate the OTC market and get involved in traditional Chinese medicine market. Based on these two cases, we analyze the internal and external environment and conducte the SWOT analysis to find out the reason on Bayer’s M & A strategy.For TOPSUN, Bayer grasp the trend of population aging and the potential of Chinese OTC market, use its own advantages of funds and brand, and deal with the drug price regulation and quality control, avoid the disadvantage of its experience and marketing in China. Bayer is focusing on the integration of the organizational structure, corporate culture, and it became one of the ten non-prescription drug manufacturers in short time.Howevere, Bayer’s traffic dropped significantly because of the failure of the marketing integration.Bayer’s acquisition of TOPSUN provided valuable experience for the development in China, we should not only rational analysis of internal and external environment to choose the right strategy, but also focus on implementation of the strategy, implement and optimize Bayer’s sustainable development in China. For DIHON in 2014, Bayer grasp the support policies of traditional Chinese medicine and the potential of Chinese OTC market, use its own advantages of funds, brand, R & D and production, and also deal with the drug price regulation and quality control, avoid the disadvantage of the lack of diversification in the raditional Chinese medicine and OTC. Since the lessons on the strategy implementation of TOPSUN, we propose that the strategy implementation of DIHON should remain temporary independence, and focus on the integration of human resources, marketing channels and corporate culture to exert a synergistic effect of the acquisition. However, acquisition is not a permanent solution, Bayer should insist on more investment in pharmaceutical research and enhance the efficiency of research. Last, we propose some enlightenment for pharmaceutical companies’development in China of Bayer’s acquisition of TOPSUN and TOPSUN.