Merck & Co Sells Consumer Unit To Bayer
For $14 Billion
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[May 06, 2014]
(Reuters) - Merck & Co Inc has
agreed to sell its consumer care business to Germany's Bayer AG for
$14.2 billion, the companies said on Tuesday, adding to a string of
major cross-border healthcare deals.
"This acquisition marks a major milestone on our path towards
global leadership in the attractive non-prescription medicines
business," Bayer's chief executive Marijn Dekkers said in a
Merck said it expects after-tax proceeds of between $8 billion and
$9 billion from the sale, which is expected to close in the second
half of 2014.
The transaction, the largest in the German healthcare industry since
Bayer bought rival Schering in 2006, will make Bayer the second
biggest over-the-counter drugs maker after Johnson & Johnson.
Bayer, the inventor of aspirin and maker of Bepanthen skin care
products and Canesten antifungal creams, has repeatedly said it
wants to overtake J&J in the rankings.
Reckitt Benckiser Group, one of the final contenders in the auction,
said on April 30 it was no longer in active talks to buy the Merck
business, leaving Bayer in pole position to win the business.
J&J commands about 4 percent of the consumer health market - worth
nearly $200 billion at the retail level - followed by Bayer and
GlaxoSmithKline (GSK) .
Merck & Co has around 1 percent with brands including Coppertone
sunscreen and Claritin allergy medicine.
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The fractured industry is consolidating fast. Novartis and GSK will
form a joint venture in consumer healthcare as part of their
agreement last month to trade more than $20 billion worth of assets.
Reuters first reported last month that Bayer and Reckitt had emerged
as frontrunners in the auction with each offering roughly $13.5
billion, a price that could come close to $14 billion if the deal
(Reporting by Ludwig Burger in Frankfurt and Esha Dey in Bangalore;
Editing by Sriraj Kalluvila and Greg Mahlich)
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