P&G buys Merck's consumer health business for US$4.2bn

Share

P&G told analysts to expect organic sales growth between two and three percent for the 2018 fiscal year, which ends in June. The company has been under consistent pressure to improve performance with its stock price falling 13 percent in the past year. The company has announced that the sale of its consumer health unit does not alter its business objective of selling the prescribed medicines such as Erbitux for treating cancer and Rebif for multiple sclerosis treatment. According to authentic sources, the reputed consumer healthcare brands added to P&G's product line through the acquisition deal are likely to improve the product portfolio quality of the firm. "With P&G we have found a strong, highly recognized player who has the necessary scale to successfully drive the business going forward".

"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", says Chairman David Taylor. "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".

Merck KGaA's consumer health businesses, whose brands include Neurobion, Dolo-Neurobion, Femibion, Nasivin, Bion3, Seven Seas and Kytta, along with many others, generate almost $1 billion in annual sales.

The Merck consumer healthcare brands generate almost $1 billion in annual sales and grew 6% in the past two years. The business pulled in new sales of around $911 million a year ago. After the transaction, the Rs 1,119-crore Merck will become the fourth legal entity in India for the Cincinnati-based P&G.

As part of the deal, P&G will buy a majority stake in the German company's Indian consumer health business, Merck Ltd, and subsequently make a mandatory tender offer to minority shareholders.

P&G serves consumers around the world with one of the strongest portfolios of brands, including Ariel, Pampers, Pantene, Crest, Downy, Gillette, Head & Shoulders, Tide and more others in approximately 70 countries worldwide. Pfizer is reviewing its options after the sale of its consumer-health business fizzled in March, with potential suitors such as Reckitt bowing out. As part of the transaction, Merck KGaA and P&G have agreed to a number of manufacturing, supply, and service agreements.

Share