Bayer Acquires Schiff for $1.2 Billion

German pharmaceutical and chemical company Bayer AG Tuesday bolstered its U.S. consumer-health operations with the acquisition of vitamins maker Schiff Nutrition Inc. for about $1.2 billion.

"The Schiff business significantly enhances our presence and position in the U.S., which accounts for more over-the-counter and nutritional products sales than any other country in the world," said Bayer Chief Executive Marijn Dekkers.

A Bayer subsidiary in the U.S. signed an agreement to buy the maker of the popular cold remedy Airborne for $34 a share—47% more than Friday's closing price. The $1.2 billion price tag includes €120 million to €130 million ($154.85 million to $167.75 million) in debt. The deal is expected to close by the end of the year.

The acquisition strengthens Bayer's position in the U.S. consumer-health market, which generates annual sales of $35 billion to $40 billion, according to Bayer. It is the latest in a string of medium-size takeovers in the U.S. for Bayer, after it bought AgraQuest, a maker of biological crop protection, for $425 million in August, and agreed to buy Teva Pharmaceutical Industries Inc.'s U.S. animal health business for up to $145 million in September.

"Bayer is committed to augment its organic growth with strategic bolt-on acquisitions" in health care and agriculture, said Mr. Dekkers.

Salt Lake City, Utah-based Schiff employs about 400 people and expects to generate net sales of $370 million to $378 million for the fiscal year ending May 31, 2013. In addition to Airborne, Schiff makes vitamins, supplements and nutrition bars, among other OTC health products.

Schiff's two main shareholders, who hold a combined 85% of voting rights in the company, have accepted the bid, triggering a squeeze-out of the minority shareholders under U.S. law, said Bayer Chief Financial Officer Werner Baumann.