Bayer Buys Merck's Consumer Care Business For $14.2 Billion
Bayer announced that it has agreed to acquire Merck Consumer Care (MCC) business for $14.2 billion and to engage in a joint global development and commercialization partnership in the field of soluble guanylate cyclase (sGC) modulators. Merck will receive an up-front payment of $1 billion with additional sales milestone payments for the sGC partnership.
The company said its acquisition of MCC will make it the second leading provider in non-prescription products worldwide and will improve Bayer’s business across several therapeutic categories and territories. MCC includes brands such as Coppertone, Dr. Scholl’s, and Claritin. Pro forma sales of the combined business reached $7.4 billion in 2013 with Merck contributing about $2.2 billion. Bayer CEO Dr. Marijn Dekkers said, “This acquisition marks a major milestone on our path towards global leadership in the attractive non-prescription medicines business... We are adding significant scope and earnings power to a business that is already delivering strong margins and stable cash flows.” Bayer said it also expects to see sales growth in key countries outside the U.S. upon completion of the acquisition.
The two companies will also collaborate in the area of cardiovascular diseases with a primary focus on sGC modulation. The partnership will include development of riociguat, which is being developed into additional life cycle indications in pulmonary hypertension classifications, and vericiguat, an investigational compound under development in two Phase IIb studies in deteriorating chronic heart failure. Bayer and Merck will implement a joint development and commercialization strategy for the sGC partnership.
Merck chairman and CEO Kenneth Frazier commented, “We are now joining forces in the area of sGC modulation to implement a joint development and commercialization collaboration that allows both companies to better explore the medical potential of the novel sGC modulators.”
Sale of Merck’s Consumer Care business to Bayer is expected to close in the second half of 2014.