Bayer to make $14 bn move for Merck unit
pharmafile | May 2, 2014 | News story | Manufacturing and Production, Research and Development, Sales and Marketing | Bayer, Boehringer, Merck, Novartis, Reckitt Benckiser, claritin, reuters
Bayer is in talks with Merck & Co to buy its consumer business and is willing to pay $14 billion for the division, people with knowledge of the matter tell Bloomberg.
A deal is believed to have been made ‘in principle’, although a formal agreement is yet to be reached, according to sources.
They add that the terms of the acquisition would include cash and an exchange of pharmaceutical assets, possibly structured as a joint venture.
Meanwhile reports from Reuters, again from people familiar with the matter, say that Bayer has also offered to swap its €1.3 billion animal health assets for the unit.
This comes after Reckitt Benckiser said earlier this week that after an initial interest, it was withdrawing from any talks after it deemed the sale of the unit too expensive. Analysts said originally a purchase would fall in the region of around $10 billion, but this seems to have now increased dramatically.
It has been reported that France-based firm Sanofi is also making a bid for the division, along with Boehringer, Novartis and Procter and Gamble who are said to be included as interested parties.
A deal would sharpen Merck’s focus on its drugs business, following along similar lines as its fellow native US firm Pfizer, which has also over the past two years shed a number of non-pharma assets.
For Bayer, this deal would help to shore up its consumer-products line by adding brands including Claritin allergy relief. It would in addition complement its own OTC business, which is currently the third biggest in the world, and its iconic patented generic Aspirin.
It was also announced this week that the German firm was looking to sell it plastics units which are worth around $10 billion, in order for it to focus on the more lucrative life sciences areas.
Bayer currently has a varied business portfolio, which includes products for crop management as well as a material sciences division.
Ben Adams
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