Procter & Gamble to acquire Merck’s consumer health business for €3.4bn

Procter & Gamble (P&G), a leading US consumer goods company, has finalized a deal to acquire the consumer health business of German pharmaceutical company Merck for approximately €3.4 billion ($4.2 billion). This all-cash transaction marks a significant expansion of P&G’s consumer health division by incorporating a range of over-the-counter (OTC) products from Merck.

Expanding P&G’s Consumer Health Portfolio

The acquisition adds a fast-growing portfolio of differentiated, OTC brands to P&G’s existing lineup, which includes well-known names like Vicks, Metamucil, Oral-B, Pepto-Bismol, and Crest. These new products are sold in 44 countries and include treatments for muscle relief, joint and back pain, colds, headaches, and support for physical activity and mobility.

David Taylor, Chairman of the Board, President and CEO of Procter & Gamble, commented on the deal: “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.”

Strategic Implications of the Acquisition

This acquisition not only enhances P&G’s capabilities in consumer healthcare but also aligns with the company’s strategy to operate a winning global OTC business independently, without the need for a healthcare partner. The integration of Merck’s consumer health business will also conclude the PGT Healthcare joint venture with Israel-based Teva Pharmaceutical Industries, set to end on July 1, subject to regulatory approvals.

Tom Finn, President of P&G Global Personal Health Care, noted: “These leading brands and the great employees of the Consumer Health business of Merck KGaA, Darmstadt, Germany, will complement our Personal Health Care business very well. This acquisition helps us continue to drive sales and profit growth for P&G by providing the capabilities and portfolio scale we need.”

For Merck, this divestment allows the company to reduce debt and focus more narrowly on its core sectors of healthcare, life science, and performance materials. Stefan Oschmann, Chairman of the Executive Board and CEO of Merck, stated: “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. With P&G, we have found a strong, highly recognized player who has the necessary scale to successfully drive the business going forward.”

The acquisition, pending regulatory approvals and customary closing conditions, is expected to be completed during the 2018/19 fiscal year. This move is poised to reshape P&G’s business landscape, bolstering its position in the global market for consumer health products.