Bayer to buy Roche consumer arm

German drugs giant Bayer is buying the over-the-counter consumer side of its Swiss rival Roche in a deal worth 2.38bn euros ($3bn; £1.6bn).

The purchase would create a consumer healthcare business ranking in the world top three, Bayer said.

Roche has been trying to sell the unit for some time, and Bayer became the most likely buyer last month after the only other industry bidder dropped out.

The plan brings together brands such as Alka-Seltzer, Rennie and Aspirin.

Too much?

Bayer's shares fell after details of the deal were announced, reflecting concerns that the company may be overpaying for the business.

It is strategically the right move though a touch expensive Ludger Mues, an analyst with Sal Oppenheim

Ludger Mues, an analyst with Sal Oppenheim, said that: "It is strategically the right move though a touch expensive".

Werner Wenning, Bayer AG's chief executive officer, said the deal would generate annual cost savings of up to 120m euros over the first three years.

The merged company will be headquartered in New Jersey and have annual sales of 2.4bn euros.

Johnson & Johnson and GlaxoSmithKline remain the two largest companies in the global consumer healthcare market

Bayer, however, said that the deal would give it a strong platform for future growth in the over-the-counter market.

Its consumer healthcare operations have been held back in recent years by a poor record of finding new blockbuster drugs and the costly recall of anti-cholesterol medicine Baycol.