Last Thursday, Merck & Co. ($MRK) agreed to sell off a Netherlands-based API plant to Aspen Pharmacare, looking to expand the plant's manufacturing operations in Europe. Merck, however, might be relieved to contract its own operations in that particular corner of the continent, as the plant is part of an inherited manufacturing network that began causing the company grief with job cutting efforts in 2010.
The plant in Oss, Netherlands, is a legacy facility from Organon, which Merck 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 a few years back, when Merck said it planned to shut down some of its operations there, as part of its post-merger restructuring. Dutch workers persuaded the company to hold off on the cuts, which would have claimed more than 2,000 jobs, and consider 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 circulate.
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 its 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 plans to continue employing more than 2,000 people in Oss.