By Ben Hirschler and Sam Cage
NEW YORK (Reuters) - Bayer AG's BAYG.DE buoyant health care business will help the drugs-chemicals hybrid ride out recession, and the same conglomerate structure makes it an unlikely bid target, a top executive said on Wednesday.
On the same day that German rival BASF AG (BASF.DE: Quote, Profile, Research, Stock Buzz) cut its 2008 profit outlook for the second time in two months, Bayer HealthCare Chief Executive Arthur Higgins said its hit from chemicals would be cushioned.
"Because of the strength of our diversity, we are in a position to absorb whatever happens in that part of the business," he told the Reuters Health Summit in New York.
Prescription drugs are set to deliver accelerating growth in the coming years, driven by potential multibillion-dollar sales opportunities for new anticoagulant Xarelto and other products, he said.
The over-the-counter medicines business, meanwhile, is enjoying very strong growth rates in emerging countries, which should offset possible pressure from growing use of own-label brands in the United States as the economy worsens.
"We are in a stronger position than the majority of our competitors," Higgins said.
There has been persistent speculation this year that Pfizer Inc (PFE.N: Quote, Profile, Research, Stock Buzz) or Novartis AG (NOVN.VX: Quote, Profile, Research, Stock Buzz) might try to acquire Bayer, which has a market value of around 30 billion euros ($38 billion), to capitalize on its healthy market position.
Bayer boasts a strong pipeline of new drugs, relative to its size, and an attractive over-the-counter medicines business.
Higgins, however, poured cold water on the idea of a takeover.
"We don't comment on rumors, but these are not very well-founded," he said.
"Don't get me wrong: they've all looked at us, because you'd be crazy not to -- if you didn't have those impediments, we'd probably be top of the list."
An acquisition by a pure pharmaceutical company would involve a tricky breakup of the group, since Bayer is also a global player in plastics and in agrochemicals.
"There is a natural protection that comes from who we are. We're still a conglomerate. We're far too complex for those companies that you've just described to even begin to imagine how they would deal with such complexity," Higgins said.
There would also be major political repercussions from the takeover of what Higgins described as a "German heritage company," which could well lead to objections from the government and the country's labor unions.
Bayer became a major champion for the German pharmaceutical sector when it bought its smaller rival, Schering AG, in 2006. Continued...
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