Bayer Healthcare, the pharmaceutical division of German chemical giant Bayer, doubled its presence in China with the acquisition of Topsun Science and Technology Co., Ltd. Bayer will pay $136 million for the over-the-counter drug business of Topsun Group, one of China's largest privately owned pharmaceutical companies. Bayer's acquisition is one of the largest to date by a western pharmaceutical company in China, the world's ninth-largest healthcare market and its fastest growing. Topsun sold $42 million in cough and cold remedies last year under leading brands including Black and White.

Such sales could seem insignificant in a Chinese OTC market valued at $1.9 billion in 2004, yet Bayer's purchase makes it a top-ten seller of non-prescription drugs in the country. The Chinese pharmaceutical industry is extremely fragmented, with over 5000 companies according to Ernst and Young. China's 2001 entry into the WTO and tightening of regulations by the government are driving rapid consolidation.

The acquisition, pending government approval, includes Topsun's manufacturing facility in JiangSu Province and a national sales force and distribution network for the brands. Topsun will continue to market traditional Chinese remedies as well as psychotropic drugs. In 2004, Bayer purchased the global non-prescription drug business of Switzerland's Roche Pharmaceuticals, gaining a substantial China foothold as well.