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Bayer to Buy Merck's Consumer Care Business for $14.2 Billion

Posted: May 6, 2014

Bayer announced it has agreed to acquire the consumer care business of Merck & Co., Inc. for a purchase price of $14.2 billion. “This acquisition marks a major milestone on our path toward global leadership in the attractive non-prescription medicines business," explained Bayer CEO Marijn Dekkers. “At the same, time we are leveraging our capabilities in the cardiovascular therapeutic area.”

The acquisition will give Bayer the global number two position in non-prescription (OTC) products following recently announced consolidations in this health care industry segment and will significantly enhance Bayer’s business across multiple therapeutic categories and geographies. Merck’s consumer care business includes leading brands such as Claritin, Coppertone and Dr. Scholl’s. Pro forma sales of the combined businesses in 2013 amounted to $7.4 billion with Merck’s business contributing approximately $2.2 billion. “We are adding significant scope and earnings power to a business that is already delivering strong margins and stable cash flows,” added Dekkers.

“The sale of our consumer care business is part of our efforts to ensure that assets within our portfolio align with our core strategy, have industry-leading potential and generate long-term shareholder value,” said Kenneth C. Frazier, chairman and CEO of Merck. “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 that strengthen our product portfolio and enhance our pipeline.”

"Merck Consumer Care is a strong business with a portfolio of well-established product brands, such as Claritin, Afrin and Coppertone that are leaders in their respective categories," said Dekkers. "The combination of Merck Consumer Care's complementary portfolio of products and geographic reach with Bayer's will create a global consumer care business better positioned to serve consumers around the world. We look forward to having the talents of the Merck team, with their track record of innovation, joining our strong consumer care team at Bayer HealthCare."

“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. “The strong Bayer brand will help to further leverage the already successful product brands worldwide. We expect particularly strong growth in key countries outside the U.S. where our superior commercial presence will drive sales of the combined business.”

Merck & Co., Inc.’s consumer care business is a major global OTC Company with strong presence in North America, the largest OTC market in the world. In 2013, Merck’s consumer care business generated approximately 70% of its sales in the U.S., where it also holds leading brand positions. The business is primarily comprised of products in the cold, allergy, sinus and flu, dermatology (including sun care), foot health and gastrointestinal categories. The most important brands are Claritin (allergy), Coppertone (sun care), Dr. Scholl's (foot health), MiraLax (gastrointestinal) and Afrin (cold). Merck’sconsumer care business has approximately 2,250 employees and is headquartered in New Jersey, Production is located in Tennessee, Georgia, Pointe Claire, Quebec, and Shanghai, China. Sun care and foot health research as well as distribution are based in Memphis, Tennessee. The merged business is to be headquartered at the Bayer site in Whippany, New Jersey.