Germany's Bayer has agreed to buy Merck & Co's non-prescription medicine and consumer care business for USD 14.2 billion, gaining products such as Claritin allergy pills, Coppertone sun lotion and Dr Scholl's footcare products.
Bayer said the deal would make it the leader in over-the-counter products in North and Latin America. Bayer already has a major non-prescription division whose brands include Aleve pain reliever, Alka-Seltzer and One-A-Day vitamins. Bayer also makes prescription drugs, industrial materials and farm chemicals.
Marijn Dekkers, Bayer's CEO, said the deal, which is subject to regulatory approval, "marks a major milestone on our path towards global leadership in the attractive non-prescription medicines business."
Bayer said it also has entered an agreement with Merck to cooperate on developing and selling drugs known as sGC modulators, which have potential for treating heart failure and pulmonary hypertension. Merck would initially pay Bayer $1 billion, with further payments contingent on sales.
Merck CEO Kenneth C Frazier said the sale was part of an effort to align the company's businesses with its strategy of being the premier research intensive drug company. Merck said it would use the money from the sale to invest in business areas with the highest growth potential and augment its drug pipeline with "external assets."
Merck, like other major drugmakers, has seen its pharmaceutical sales slide due to the onset of cheaper generic versions of several drugs that once raked in billions annually. Those include the asthma and allergy pill Singulair, the allergy spray Nasonex and the blood pressure drugs Cozaar and Hyzaar.
Merck, which is headquartered in Whitehouse Station, New Jersey, reported a 7 percent rise in first-quarter earnings late last month. But that was mainly thanks to steep cuts to administrative and marketing expenses and research spending. It reduced its global workforce by 2,000 in the quarter to 74,000.
