Bayer defers to Reckitt Benckiser’s Schiff Nutrition buyout bid

Bayer has announced that it has chosen not to pursue its previously-announced acquisition of Schiff Nutrition, allowing Reckitt Benckiser to close a deal to purchase the company instead.

An agreement was signed last month that was to see Bayer purchasing Schiff for $1.2 billion (752.6 million pounds), with a stipulation which permitted Schiff to review and accept an unsolicited bid within 30 days.

Subsequently, Reckitt Benckiser put forward a rival offer valued at $1.4 billion and Bayer has expressed its unwillingness to enter into a competitive bidding process, as this could have resulted in the price rising outside Bayer's set financial criteria.

Following the termination of the deal, Bayer has received a $22 million break-up fee from Schiff, while Reckitt Benckiser has closed a definitive merger agreement to buy the company.

Reckitt Benckiser chief executive officer (CEO) Rakesh Kapoor believes the buyout will allow his company to make inroads into the lucrative global vitamins, minerals and supplements market.

Meanwhile, Bayer CEO Dr Marijn Dekkers said: "After a number of successful acquisitions, we will continue our strategy to augment organic growth with strategic bolt-on acquisitions."