Bayer will acquire the US-headquartered Merck Consumer Care for $14.2 billion (€10.4bn) in a transaction that will include Merck’s existing OTC business that encompasses the global trademark and prescription rights for allergies medicine Claritin and decongestion medicine Afrin.
The deal is a collaborative agreement that also includes clinical development collaboration between Bayer and Merck focusing mainly on pharmaceutical products for cardiovascular disease, which will also see Bayer receive a $1 billion up-front payment from Merck.
Merck to focus on biopharmaceutical category
The sale of the business is part of Merck’s strategy to focus on developing its core strength as an industry-leading in the biopharmaceutical area, while Bayer is looking to expand its footprint in the OTC category.
“We are adding significant scope and earnings power to a business that is already delivering strong margins and stable cash flows,” added Bayer CEO Dr. Marjin Dekkers.
The Merck Consumer Care division consists of a wide ranging portfolio that includes personal care, pharmaceuticals, vaccines, and animal health products that are marketed worldwide.
Foot care and sun care
Within the vast consumer care division brands touching on the cosmetics and personal care segment include Coppertone and Bain de Soleil sunscreen products, Dr. Scholl foot care products, and some medicated skin care products, including the A+D Original Ointment brand.
“With this transaction, we are acquiring leading product brands that will make Bayer the OTC leader in North America and Latin America and also move us into top global positions in key OTC product categories,” said Olivier Brandicourt, CEO of Bayer HealthCare.
Merck says it expects to close the sale in the second half of 2014, providing all the customary closing conditions and regulatory conditions are met within that time-frame.