Roche denies Bayer offer

August 28, 2001 Posted: 1409 GMT

LONDON (CNN) -- Swiss pharmaceutical company Roche Holding rejected a report that it offered to buy the drug unit of German rival Bayer for $20 billion.

"Roche has not held talks with Bayer about an acquisition nor agreed on a meeting with Bayer," the Basel-based drugmaker said in a statement.

News agency Reuters had said earlier that Roche made an offer consisting of a mixture of stock and cash, citing unidentified people familiar with the matter.   

Roche said it does not normally comment on market rumors, but did so this time "to avoid the spread of further speculation generated by the detailed comments of unknown sources."

Bayer Chief Executive Manfred Schneider said earlier this month two major companies had expressed interest in the pharmaceutical business.

The future of the division is under review at Bayer, following the company's decision on August 8 to withdraw cholesterol-lowering drug Baycol from sale  on safety grounds. Reports had linked the drug to more than 50 deaths.

The Reuters report had said Bayer was expected to discuss the Roche proposal at a meeting with its supervisory board on September 13.

The German drug and chemicals company, which discovered aspirin a century ago, saw its stock lose more than a third of its value in the week after the withdrawal. On Monday, Bayer stock closed at 35.09 in Frankfurt, down 14 percent since the withdrawal.

Investment bank Credit Suisse First Boston and Deutsche Bank are helping Bayer on its strategy.

Roche has been under pressure to revitalize its drug business following serious product setbacks in recent years and a slowdown in sales growth. Revenue increased five percent in the first half of 2001, below the industry average of 10 percent.

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