UPDATE 1-Bayer mulls diabetes device unit sale -sources

Wed May 9, 2012 10:36am EDT

* Business has annual sales of about 1 bln eur

* Sale could increase firepower for acquisitions-sources

* Bayer declines to comment (Recasts with own sources)

FRANKFURT, May 9 (Reuters) - Germany's largest drugmaker Bayer is considering the sale of its blood glucose meters business as it offers few synergies with its other healthcare activities, two people familiar with the matter said on Wednesday.

Bayer has held talks with prospective buyers of its Diabetes Care unit, which has annual sales of about 1 billion euros ($1.3 billion), the sources said.

Proceeds from the sale could increase Bayer's flexibility as it looks for takeover opportunities, they said. Bayer has said that while its focus is on organic growth it would look for acquisition targets to strengthen its healthcare or genetically modified seeds businesses.

Financial Times Deutschland had reported the mooted sale earlier in its Wednesday edition.

Bayer declined to comment. ($1=0.7695 euros) (Reporting by Arno Schuetze, Alexander Huebner and Frank Siebelt; Writing by Ludwig Burger; Editing by Ed Lane and Mike Nesbit)