Procter & Gamble Co has agreed to acquire the consumer health business of German pharmaceuticals company Merck KGaA for about 3.4 billion euros ($4.21 billion) in cash, the companies said on Thursday.
P&G said the acquisition will enable it to expand its portfolio of consumer healthcare capabilities and brands. Merck's consumer health unit includes brands such as Femibion, Neurobion, Nasivin and Seven Seas.
The offer price suggests that Merck climbed down from price demands of as much as 4 billion euros, which sources have told Reuters deterred initial suitors such as Nestle, Perrigo and Stada owners Bain and Cinven.
The agreement is expected to close by fourth quarter 2018, Merck said in a separate statement.
Transition to P&G
As part of the transaction, Merck said, it is contemplated that about 3,300 employees, mainly from the consumer health unit, will transition to P&G upon completion of the transaction, subject to prior works council consultation where required.
"The attractive price reflects the high asset value and the performance Consumer Health has delivered," said Stefan Oschmann, chief executive of Merck.
For Merck's Indian business, P&G will buy a majority stake in Merck Ltd and subsequently make a mandatory tender offer to minority shareholders.