NEW YORK Bayer AG's HealthCare division has launched a global consolidation review, the company has confirmed.
Bayer HealthCare is the German pharmaceutical and chemical giant's biggest division, ringing up 46.8 percent of the firm's total revenue, or $21.8 billion in sales, according to the 2008 annual report. The company said it spent $3.8 billion on overall marketing expenses in 2008. It could not be determined how much of that went to its HealthCare operations.
"Bayer HealthCare confirmed today that the company has initiated a global creative sourcing initiative," said Susan Yarin, director of global communications at the division. "The project will include a review of the company's processes, partners and overall approach in the areas of creative services and media buying to determine whether there are ways to improve the effectiveness and efficiency of its product and company communications."
She said the review of "the agency landscape and negotiations" would likely be completed by the end of the third quarter.
Yarin declined to say which companies are participating in the process. It is believed to be a holding-company review involving some of the industry's largest players. WPP Group's JWT unit and Omnicom's BBDO both handle portions of the assignment. Bayer's media agencies include Interpublic's Initiative in the U.S. and WPP's Mindshare, which works for Bayer in the U.K., Brazil, Malaysia, Singapore and Vietnam.
Agency reps either declined comment or referred calls to the client.
Sources said that New York consultancy Roth Associates is helping to manage the process. Roth did not return calls.
Participants have already met with the client but a formal response to the company's RFP is not due until later this summer.
The division includes units that produce products for a range of consumer care needs, as well as treatments for human diabetes and animal health. It also encompasses products marketed under Bayer's alliance with Schering-Plough. --with Andrew McMains