Procter & Gamble (P&G) has agreed to acquire the consumer health business of Merck KGaA, for approximately EUR 3.4 billion ($4.2 billion).

The acquisition provides P&G with healthcare commercial and supply capabilities, technical capabilities, and consumer healthcare leadership that will add to P&G’s existing consumer healthcare capabilities and brands such as Vicks, Metamucil, Pepto-Bismol, Crest, and Oral-B.

P&G said that the acquisition of the consumer health business of Merck KGaA, will improve its over-the-counter (OTC) geographic scale, brand portfolio, and category footprint. These brands provide solutions in relieving muscle, joint and back pain, colds and headaches, as well as supporting physical activity and mobility, many of which are treatment areas not currently addressed in P&G’s portfolio, according to P&G.

The $1-billion consumer health business of Merck KGaA, grew 6% over the past two years. Top brands include Neurobion, a vitamin B supplement; Dolo-Neurobion, a combo of paracetamol and vitamins B1, B6, B12; Femibion, a pregnancy multivitamin; Nasivin, a nasal decongestant; Bion3, a multivitamin supplement; Seven Seas, a cod-liver oil; and Kytta, a pain ointment, along with others. These are sold primarily in Europe, Latin America, and Asia. The consumer health business of Merck KGaA is active across 44 countries and includes more than 900 products.

The acquisition of the consumer health business of Merck KGaA replaces the PGT Healthcare joint venture P&G had with Teva Pharmaceutical Industries, which will be terminated July 1, 2018, pending regulatory approvals. The companies formed the joint venture in 2011 to develop and commercialize branded OTC medicines. Following a recent review, Teva and P&G concluded that priorities and strategies were no longer aligned and agreed to terms where it would be mutually beneficial to terminate the partnership. PGT product assets will return to their respective parent companies to reestablish independent OTC businesses.

P&G is targeting to close this deal during the 2018/19 fiscal year, subject to customary closing conditions and regulatory clearances.

Source: Procter & Gamble