* To pay $60 mln upfront, up to $85 mln in milestones
* Bayer reverts to smaller veterinary deals
* Expects to close deal in 2013 after regulatory clearance
(Adds background, details)
FRANKFURT, Sept 14 German drugmaker Bayer
agreed to buy Teva's U.S. animal health
operations for up to $145 million, as it looks to shore up its
veterinary drugs business with smaller deals for lack of bigger
The price includes an upfront payment of $60 million and a
further $85 million in milestone payments linked to
manufacturing and sales targets, Bayer said on Friday.
Bayer is reverting to a string of smaller steps to shore up
its animal health unit, the industry's No.5 globally, after
Pfizer refrained from selling its veterinary unit with $4.2
billion in annual revenue, opting to take it public instead.
"We keep our eyes open and assess any businesses that are on
offer in the market," a Bayer spokeswoman said, adding that
larger assets were currently not available.
Drugmakers, under pressure from patent expiries and cutbacks
in healthcare budgets, are drawn to animal health because it
offers more stable margins and growth potential, as pet
ownership increases faster than the overall economy in emerging
Earlier this year, people familiar with the matter said
Bayer had sounded out debt funding options with banks to prepare
for takeover opportunities, such as one that could have arisen
from Pfizer's planned exit from animal health.
But Pfizer's Zoetis Inc unit filed for an initial public
offering last month involving the sale of stock worth some $100
Bayer Chief Executive Marijn Dekkers took the post in 2010
with a reputation for being able to handle transformational
takeovers, but the Teva deal is the latest in a line of small
and medium-sized acquisitions.
Dekkers has said he will try to boost the group's healthcare
and crop protection and genetically modified seeds units via
takeovers, but that organic growth remains a "key priority".
The German group expects to close the deal in 2013, once it
gains antitrust and regulatory clearance.
(Reporting by Ludwig Burger and Andreas Kroener)