Bayer concludes $14bn Merck consumer care takeover
pharmafile | May 7, 2014 | News story | Sales and Marketing | Bayer, Merck, OTC, consumer care, merger
Bayer has confirmed its acquisition of US firm Merck’s over-the-counter (OTC) portfolio in a deal worth $14 billion.
The arrangement sees the German company take control of well-known consumer brands such as Coppertone sunscreen, MiraLAX laxatives, and Dr Scholl’s footcare products.
Bayer chief executive Olivier Brandicourt says he expects the acquisition to make his firm the top OTC drugmaker in North and Latin America, along with increasing its status in other non-prescription categories worldwide.
He adds: “We expect particularly strong growth in key countries outside the US where our superior commercial presence will drive sales of the combined business.”
Reuters reports that the deal is the largest of its kind in Germany since Bayer bought Schering for $24 billion in 2006. Its newly-expanded portfolio will see Bayer become the world’s second-largest consumer healthcare company, behind Johnson & Johnson.
The announcement follows unofficial reports in early May that Bayer was preparing an offer for Merck’s OTC unit after rival bidder Reckitt Benckiser withdrew from the race. Other firms which had previously registered interest include Boehringer, Novartis and Procter & Gamble.
Merck will now be free to concentrate on its ‘core strategy’ of drug development, says the firm’s chief executive Kenneth Frazier.
He adds: “By unlocking value in Merck Consumer Care, we’re able to further our goal of being the premier research-intensive biopharmaceutical company through targeted investments.”
Takeovers and asset exchanges appear to be in vogue at the moment among pharma’s big players. In April, Novartis and GlaxoSmithKline signed a multi-billion dollar deal which saw the firms effectively swap large sections of their business operations.
Even more notably, Pfizer is currently pushing for a buyout of major rival AstraZeneca in a proposed $106 billion deal that has caused considerable controversy in the UK.
Bayer has a varied portfolio covering both OTC and prescription drugs, as well as agricultural products. Its established products include the patented generic Aspirin, which the firm originally developed in the 19th century.
Bayer’s arrangement with Merck follows its $2.9 billion buyout of Norwegian pharma firm Algeta and its cancer treatment Xofigo (radium Ra 223 dichloride) last December.
Hugh McCafferty
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