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Nestle reportedly pulls out in front to buy Merck KGaA consumer health unit with $5 billion bid

pharmafile | January 11, 2018 | News story | Sales and Marketing |  Merck KGaA, nestle, pharma 

It has been reported that Swiss food giant Nestle has pulled out in front as the top bidder for Merck KGaA’s consumer health business, allegedly offering up to $5 billion.

As reported by Bloomberg, sources close to the matter disclosed the information, but were forced to remain anonymous as the details of the deal are still confidential. According to the sources, companies previously interested in snatching up the business have dropped out of the bidding, including healthcare organisation Perrigo and private equity firms Bain and Cinven, while Reckitt Benckiser and Mylan are still reportedly in the running.

Nestle has been making moves to bolster its own health business, acquiring Canadian supplements firm Atrium Innovations in December for $2.3 billion.  

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Merck KGaA revealed in September last year that it was assessing its options on what to do with its consumer health unit as it looks for funds to reduce its debt and focus its efforts on its pharmaceutical business. It said that these options could include a full or partial sale of the unit, as well as the potential for strategic partnerships.

Analysts believe that the consumer health business, which made around $1 billion in 2016, could ultimately sell for around $4-5 billion, though it is important to note that, so far, no final decision has been made, and the German drug firm could still opt to keep hold of the asset.

Matt Fellows

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