For Aspen Pharmacare, the purchase of a Netherlands-based API plant from Merck & Co. ($MRK), announced Thursday, was just a piece of a European expansion strategy that has recently taken flight. But for Merck, the plant is a piece of an inherited company that has been at the center of labor controversy in years past, and the sale will allow it to preserve some jobs there.
The plant in Oss, Netherlands, is a legacy facility from Organon, which Merck--called MSD in Europe--picked up when it merged with Schering-Plough in 2009. Shortly thereafter, threats of job cuts at Organon's manufacturing and R&D outfits triggered an uproar. A Merck spokeswoman told FiercePharma that preserving jobs this time around was "an important consideration" in this sale, and that all 960 or so employees who primarily support API operations in Oss will transfer to Aspen.
Troubles started in Oss in 2010, when restructuring global operations in the wake of the merger led Merck to indicate it would shut down some of its activity there. Dutch workers persuaded the company to hold off on job cuts, which would have claimed over 2,000 jobs, to come up with other options. Merck agreed to negotiate, thus avoiding a court case, and set an end-of-2010 deadline; that cutoff was later postponed through the following February, when talks of a possible sale of an R&D site began to swirl.
But unloading the center didn't prove easy. In February 2011, Merck announced it was unable to find a buyer for the R&D division, though Takeda, Dutch bioscience company Pantarhei and Aspen had reportedly been in bidding discussions. Merck later told a Dutch court that it had to turn down an offer for Organon because it would have cost $700 million more than shutting down the operation altogether.
Ultimately, protests convinced Merck to scale back the job cuts. But since acquiring Schering-Plough, the company says, all of MSD's manufacturing operations have been undergoing an evaluation to "ensure that we have the capacity and capability resources to support our growth strategy, business needs and worldwide supply chain demands." The Aspen transaction should ease some of the burden, and after it's complete, the company will still employ more than 2,000 people in Oss, it says.
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