* Glucose monitoring business had 909 mln euros in '14 sales
* Panasonic Healthcare to focus on cheaper products
* Agreed price 1.02 billion euros or 138 billion yen (Adds industry background, deal logic)
FRANKFURT, June 10 (Reuters) - Bayer has agreed to sell its Diabetes Care business to Panasonic Healthcare Holdings, backed by KKR and Panasonic Corp, for 1.02 billion euros ($1.15 billion), the company said on Wednesday.
The deal, expected to be completed in the first quarter of 2016, marks Bayer's second attempt to divest the blood glucose monitoring business which has brands such as Contour, Breeze, Elite and Microlet.
Bayer tried to find a buyer for the business in 2012 and revived efforts to sell it in November. The industry as a whole has been grappling with increased competition and pressure to cut reimbursements from public-sector medical insurers.
The company's annual report said the Diabetes Care unit was hit by reimbursement pressure and price decreases in the United States last year. The business had 909 million euros in sales last year and collaborates with U.S. medical technology company Medtronic.
Panasonic Healthcare, also a maker of blood glucose meters, said in a statement the combined business would use its size to offer more affordable devices in response to a overall decline in prices and growing volumes in the industry.
Rivals in the market for glucose meters include Abbott , Roche's diagnostics division and Johnson & Johnson's Lifescan unit.
The sale is part of Bayer's efforts to overhaul its structure, which includes plans to list its plastics business on the stock market to free up money for investments and acquisitions in healthcare, veterinary drugs and crop protection products.
($1 = 0.8846 euros) (Reporting by Ludwig Burger and Christoph Steitz. Editing by Jane Merriman)