Sector News

Merck sells consumer health business to P&G for $4.2 billion

April 19, 2018
Life sciences

Merck on Thursday announced that it has signed an agreement to sell its global consumer health business to Procter & Gamble (P&G) for approximately €3.4 billion ($4.2 billion) in cash.

The transaction, which is expected to close by the end of the fourth quarter 2018, is subject to regulatory approvals and satisfaction of certain other customary closing conditions. Merck intends to use the net proceeds from the divestiture primarily to accelerate deleveraging. At the same time, it will allow Merck to increase flexibility to strengthen its remaining three business sectors.

“The divestment of the consumer health business is an important step in Merck’s strategic focus on innovation driven businesses within healthcare, life science and performance materials… The attractive price reflects the high asset value and the performance consumer health has delivered,” said Stefan Oschmann, chairman of the executive board and CEO of Merck. David Taylor P&G chairman, president and CEO, said, “We like the steady, broad-based growth of the OTC healthcare market and are pleased to add Merck’s consumer health portfolio and people to the P&G family.”

Between 2015 and 2017, Merck’s consumer health net sales grew organically by a combined 6%, outpacing the consumer health market’s growth of approximately 4% over the same period. In 2017, sales of the consumer health business amounted to €911 million.

The transaction will be executed through the sale of Merck’s shares in a number of legal entities as well as various asset sales and comprises the consumer health business across 44 countries, including more than 900 products and two consumer health-managed production sites at Spittal, Austria; and Goa, India. As part of the transaction, approximately 3,300 employees, mainly from consumer health, will transition to P&G, subject to prior works council consultation where required. This includes Merck employees who, through their work, are fully dedicated to consumer health, and employees in share deal entities. 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 to acquire the shares and assets after consultations with the relevant works council representatives. For the Indian business, it has been agreed that P&G will acquire Merck’s majority shareholding in Merck Ltd. (India), a publicly traded company, and subsequently make a mandatory tender offer to minority shareholders. As part of the transaction, Merck and P&G have agreed a number of manufacturing, supply and service agreements.

In September 2017 Merck announced that it was preparing strategic options for consumer health, including a potential full or partial sale of the business as well as strategic partnerships. J.P. Morgan acted as financial adviser to Merck, and Freshfields Bruckhaus Deringer acted as a legal adviser to Merck.

By Natasha Alperowicz

Source: Chemical Week

comments closed

Related News

January 15, 2022

Colorcon Ventures invests in AI-Driven bio-simulation company VeriSIM Life

Life sciences

Colorcon Ventures, the corporate venture fund of Colorcon Inc., has invested in VeriSIM Life, a San Francisco-based startup with a digital bio-simulation platform that accelerates drug development and reduces animal testing.

January 15, 2022

A record number of biotechs are going public. Here’s how they’re performing.

Life sciences

Initial public offerings have fueled biotech’s boom. Keep track of them as they happen with this database. Which biotechs create value over time, and which fail? What types of companies are generating the best returns? Who are their top investors? Biopharma Dive is tracking these details in the database which will be updated regularly.

January 15, 2022

Sanofi cuts ties with Sangamo, sharpening focus on ‘off-the-shelf’ cell therapy

Life sciences

Sanofi has ended a long-running alliance with Sangamo Therapeutics to develop genetic medicines for inherited blood disorders, among them an experimental sickle cell disease therapy that is in early clinical testing.
The two have been developing complex, personalized treatments, led by a sickle cell drug known as SAR445136. But Sanofi is now more interested in off-the-shelf approaches, which are meant to be more convenient.

Send this to a friend