German Firm to Reclaim Bayer Aspirin Name : Drugs: It will acquire Sterling Winthrop’s over-the-counter business and recover the rights it lost after WWI.
Bayer didn’t work wonders for its previous owner.
Now the German company that developed the popular painkiller in 1897 says it is regaining U.S. trademark rights that it lost after World War I and hopes to revive the brand.
Bayer said Monday that it will regain the U.S. rights to the Bayer aspirin name by acquiring Sterling Winthrop’s over-the-counter medication business in the United States, Canada and Puerto Rico from Britain’s SmithKline Beecham for $1 billion.
Just two weeks ago, SmithKline bought Sterling’s worldwide OTC business from Eastman Kodak Co. for $2.9 billion. Bayer had lost out to British-based SmithKline in the bidding for the entire Sterling business, but it now will get about a third of it.
Bayer, a chemical and pharmaceuticals firm, lost U.S. trademark rights to Bayer 75 years ago, when German properties were seized as part of World War I reparations. Sterling bought Bayer’s U.S. operations--including the right to the Bayer name--at auction for $5.3 million in 1918.
Bayer has been fighting since then to regain U.S. rights and has traded lawsuits with Sterling for more than 50 years.
But the German namesake firm is acquiring a product that was mostly a headache for its longtime owner, Kodak. While U.S. sales in the $2.4-billion analgesics market have been flat, sales of Bayer and the non-aspirin Bayer Select products fell 17% to $126.6 million for the 12 months ended July 31, according to market researcher Information Resource’s Towne-Oller & Associates unit.
For years, Bayer has watched aspirin sales slip as rival analgesics such as acetaminophen-based Tylenol and ibuprofen-based Advil gained ground. Last year, Bayer struck back by introducing Bayer Select, a group of products based on ibuprofen and acetaminophen. But the new products haven’t caught on.
“We realize that Bayer aspirin in the United States does not have the most modern or progressive image and has been struggling for market share,” said Thomas Reinert, a spokesman at Bayer headquarters in Leverkusen, Germany.
“We believe we can push it to a stronger position,” he said.
Reinert said the Bayer brand name and symbol--a circle and cross formed by spelling Bayer horizontally and vertically--is much better known in Europe and other markets. He said Bayer will aggressively promote the Bayer name and trademark to increase its visibility in the United States.
While Bayer aspirin and Bayer Select make up about a third of the business acquired from SmithKline, Bayer is getting other popular brands, including the painkiller Midol, the antacid Phillips’ Milk of Magnesia, Stri-dex acne treatments and Neo-synephrine nasal spray.
Altogether, the assets Bayer is acquiring through its Pittsburgh-based Miles Inc. subsidiary had 1993 earnings of $43 million on sales of $366 million.
Bayer has said previously that it wanted to expand its drug business in the important U.S. market. Last year, Bayer acquired a minority stake in Schein Pharmaceuticals, a large U.S. maker of generic drugs.
SmithKline said it will retain North American rights to Panadol, a non-aspirin painkiller sold in Canada, as well as the rest of Sterling’s worldwide business.
The British-based pharmaceutical company said the deal allows it to shed some drugs that overlap with existing lines.
SmithKline’s existing brands include Tums antacid, Oxy brand acne treatments and Contac cold and flu medications.
SmithKline said it will use cash proceeds from the Bayer deal to pay off debt from its recent acquisition of Sterling.