Global consumer products major, The Procter & Gamble Company (P&G), will acquire a almost 52% stake in drug firm Merck India for Rs 1,300 crore as part of a global deal under which it will take over the worldwide consumer health business of Germany's Merck KGaA.
"The divestment of our Consumer Health is an important step in our strategic focus on innovation-driven businesses within Healthcare, Life Science and Performance Materials".
It also offers P&G with healthcare commercial and supply capabilities, deep technical mastery and proven consumer healthcare leadership.
"We like the steady, broad-based growth of the OTC Health Care market and are pleased to add the Consumer Health portfolio and people of Merck KGaA, Darmstadt, Germany, to the P&G family", said David Taylor, Chairman of the Board, President and Chief Executive Officer. "With P&G we have found a strong, highly recognized player who has the necessary scale to successfully drive the business going forward".
The Merck portfolio "brings a strong set of brands, products and capabilities" to P&G, added Steve Bishop, group president for global health care, "and provides an attractive and complementary footprint to further fuel growth".
Annual revenue at the prescription-free unit last grew by more than seven percent to 911 million euros in 2017.
The deal means Cincinnati-based Procter & Gamble, whose over-the-counter brands include Pepto-Bismol and NyQuil, acquires a business that saw 6 percent organic sales growth in 2015-2017.
The transaction will be executed through the sale of Merck KGaA's shares in a number of legal entities as well as various asset sales.
Merck KGaA's consumer health businesses, whose brands include Neurobion, Dolo-Neurobion, Femibion, Nasivin, Bion3, Seven Seas and Kytta, along with many others, generate almost $1 billion in annual sales.
As part of the transaction, around 3,300 employees are expected to transition to P&G, subject to prior works council consultation where required.
Part of the deal includes P&G's purchase of a majority stake in Merck's consumer health care business in India, Merck Ltd.