Processing Magazine

Bayer to take over Merck's consumer care business in $14.2 billion deal

May 13, 2014
Bayer Group Headquarters <photocredit>Photo copyright Bayer AG</photocredit>

German pharmaceutical giant Bayer is acquiring the over-the-counter medicines business of U.S. rival Merck & Co., Inc. in a move that will make the German company the largest producer of this type of drugs in the United States.

Merck will receive $14.2 billion in return for its consumer care products, including several blockbusters like anti-allergy treatment drug Claritin, foot care product range Dr. Scholl's and nasal decongestant Afrin. The U.S. company has a significant share at home, with about 70 percent of its sales made on the U.S. market. Bayer said that the two businesses' combined sales last year came in at $7.4 billion, with Merck contributing about $2.2 billion.

According to a statement by Bayer this purchase will allow the German company to strengthen its position as a leader on the global market for over-the-counter products, while the integration of the businesses is expected to generate significant cost synergies over the next few years.

Chief executive officer Marijn Dekkers added that the cooperation with Merck will enhance Bayer's capabilities in the treatment of cardiovascular conditions. As a part of the deal Merck will work with Bayer on the development and commercialization of therapies for cardiovascular disease, including hypertension drug Adempas, which has already been approved for sale in Europe and Japan, among other regions. Merck will pay Bayer $1 billion for this collaboration, with further payments due if sales targets are met.