Procter & Gamble buying Merck's health brands for $4.2B

Lawrence Cooper
April 22, 2018

Merck mainly intends to use the proceeds to reduce its corporate debt burden and expressed hope that the sale could be concluded by the end of 2018, subject to approval of regulatory authorities. "Consumer Health is a strong business that deserves the best possible opportunities for its future development".

Over three thousand employees of Merck are expected to shift to P&G after the purchase deal is finalized by the fourth quarter of this year.

"We like the steady, broad-based growth of the OTC Health Care market and are pleased to add the Consumer Health portfolio and people of Merck KGaA, Darmstadt, Germany, to the P&G family", said David Taylor, Chairman of the Board, President and Chief Executive Officer. In turn, the American company said it will increase the unit's geographic presence and strengthen its existing positions in the world's top OTC markets. "The Consumer Health business of Merck ... brings a strong set of brands, products and capabilities, and provides an attractive and complementary footprint to further fuel growth as we continue to grow our existing leading brands". It now looks to the Merck portfolio to help drive success.

German Merck has been considering a sale of the business since late a year ago, and had according to Reuters had attracted suitors such as Nestle, Perrigo, and Stada owners Bain and Cinven.

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The deal means Cincinnati-based Procter & Gamble, whose over-the-counter brands include Pepto-Bismol and NyQuil, acquires a business that saw 6 percent organic sales growth in 2015-2017.

German company Merck KGaA provides a broad range of OTC products and is active across 44 countries and includes more than 900 products.

At this time, the transaction does not comprise the French Consumer Health business, where P&G has made a binding offer to acquire the shares and assets, depending on Merck KGaA, informing and consulting the relevant works council representatives. As a part of the agreement, P&G is projected to buy majority of shares in Merck's India consumer healthcare business.

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