Bayer becomes No 1 US over-the-counter pharma company with $14.2 billion Merck deal
Merck is selling its over-the-counter medicine business, including the allergy-treatment Claritin and nasal decongestant Afrin, to Bayer for $14.2 billion. The deal makes Bayer the second-biggest seller of over-the-counter products in the world and the biggest in North America. where the Merck business generated about 70% of its sales last year.
Merck: Collaboration with Bayer ahead
The deal, said the Wall Street Journal, includes collaboration on certain drug development and will allow Merck to focus on therapeutic areas where it feels it is strongest, including drugs for cancer and diabetes as well as vaccines.
Bayer said the combined consumer care divisions of Bayer and Merck had sales of about $7.4 billion in 2013.
The purchase is Bayer's second-biggest after buying Schering AG for $17 billion in 2006.
Bayer Chief Executive Marijn Dekkers said the acquisition marked "a major milestone on our path towards global leadership in the attractive nonprescription medicines business," Bayer's consumer-health segment already includes Aspirin.
The WSJ said the move came amid a wave of pharmaceutical deals as companies look to bolster and retool product portfolios in an effort to focus on their perceived strengths.
Merck had said earlier in the year that it was looking to sell the consumer business, expects the deal to close during the second half of this year, with after-tax proceeds of between $8 billion and $9 billion.
Bayer's aim is to build up its health-care portfolio with bolt-on acquisitions. Last year, it bought Germany's Steigerwald and China's Dihon Pharmaceuticals, two herbal medicine companies. It also recently spent $2.86 billion for Norway's Algeta ASA, its partner on a new prostate cancer treatment.
Britain's Reckitt Benckiser Group reportedly pulled out of discussions last week for Merck and Bayer was also said to have outbid privately-held rival Boehringer-Ingelheim.
Bayer and Merck are also to collaborate on the development of therapies for cardiovascular disease, including the hypertension drug Adempas, which is marketed in the U.S., Europe and Japan.
The companies will split costs and profits from the collaboration and create a joint development and marketing plan, Merck said.
The deal also includes MiraLAX constipation medicine, Dr. Scholl's foot-care products, Coppertone sunscreens, and Lotrimin and Tinactin antifungals.
Meanwhile Pfizer has been pursuing its British rival AstraZeneca PLC since November, but AstraZeneca has rejected the advances, saying Pfizer's most recent cash and stock proposal "substantially" undervalued the company.
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