Merck to sell global consumer health business to P&G for $4.2bn

Vitamins

Vitamins

Mumba- German drug manufacturer Merck on Thursday said it will sell its global consumer health business to Procter and Gamble (P&G) for United States dollars 4.2 billion.

The deal will allow the company to expand its consumer health care business by adding vitamin brands such as Seven Seas to its stable of brands that includes Pampers and Vicks cough and cold products. The Merck consumer healthcare brands generate almost $1 billion in annual sales and grew 6% in the past two years.

The Merck portfolio "brings a strong set of brands, products and capabilities" to P&G, added Steve Bishop, group president for global health care, "and provides an attractive and complementary footprint to further fuel growth".

The world's largest consumer goods maker generated 12% of group sales, or $7.5 billion, from health-care products past year, including Vicks cold relief, Pepto-Bismol, and Oral-B toothbrushes and toothpastes.

Merck, which has been seeking to focus on its prescription drug business, had sought as much as 4 billion euros for its consumer health unit.

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




P&G also announced it will split up its consumer care joint venture with Teva, PGT Healthcare, on July 1, saying strategies were no longer aligned.

The deal came after the agreement of GlaxoSmithKline to buy Novartis out of their consumer healthcare joint venture for thirteen billion dollars after giving up on its pursuit of Pfizer's consumer unit.

"In other news, P&G reported better-than-expected quarterly revenue on Thursday, boosted by strong sales in its beauty, and fabric and home-care businesses", according to a Reuters report on CNBC.

"It is a clear demonstration of our continued commitment to actively shape our portfolio as a leading science and technology company", Stefan Oschmann, Chairman of the Executive Board and CEO of Merck, said in a statement.

GSK had decided against buying Pfizer consumer health unit, which was also up for sale since last autumn.

The transaction comes after it was rumored earlier this month that Mylan NV was working on a deal for Merck's consumer health business.

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