Procter & Gamble to buy the consumer health business of Merck KGaA for $4.2 bn

Procter & Gamble (P&G) yesterday struck a deal to buy the consumer health business of Germany's Merck KGaA for $4.2 billion (€3.4 billion) in order to expand its portfolio of consumer health-care products.

In September 2017 Merck had said that it was preparing strategic options for its consumer health business, including a potential full or partial sale of the business as well as strategic partnerships.
Darmstadt, Germany-based Merck KGaA’s consumer health business is active across 44 countries and includes more than 900 products and two Consumer Health-managed production sites in Spittal (Austria) and Goa (India).
Merck KGaA’s consumer health businesses, whose brands include Neurobion, Dolo-Neurobion, Femibion, Nasivin, Bion3, Seven Seas and Kytta, along with many others, generate nearly $1 billion in annual sales.
The transaction will be executed through the sale of Merck KGaA’s shares in a number of legal entities as well as various asset sales.
As part of the transaction, approximately 3,300 employees, mainly from consumer health, will be absorbed by P&G upon completion of the transaction.
The sale of the global consumer health business does not yet comprise the French consumer health business, where P&G has made a binding offer.
As part of the deal, P&G will acquire a majority stake of 51.80 per cent stake in India listed drug firm Merck Ltd for Rs 1,289.88 crore and subsequently make a mandatory tender offer to minority shareholders.
P&G said that the acquisition will improve its OTC geographic scale, brand portfolio and category footprint in the vast majority of the world’s top 15 OTC markets.
These brands provide solutions in relieving muscle, joint and back pain, colds and headaches, as well as supporting physical activity and mobility, many of which are treatment areas not currently in P&G’s portfolio.
“These leading brands and the great employees of the consumer health business of Merck KGaA, Darmstadt, Germany, will complement our personal health care business very well,” said Tom Finn, president, P&G Global personal health care. “This acquisition helps us continue to drive sales and profit growth for P&G by providing the capabilities and portfolio scale we need to operate a winning global OTC business on our own, without the aid of a health care partner.”
“The divestment of our Consumer Health is an important step in our strategic focus on innovation-driven businesses within Healthcare, Life Science and Performance Materials. It is a clear demonstration of our continued commitment to actively shape our portfolio as a leading science and technology company,” said Stefan Oschmann, chairman of the executive board and CEO of Merck KGaA.