Merck KGaA mulls consumer health selloff

Germany's Merck isn't among the biggest drugmakers, but it faces many of the same problems: pricing pressures and regulatory setbacks. And it has approached those problems in similar ways, namely by looking to diversify by building up its consumer health business; branching out via acquisition, such as its buyout of Millipore; and juggling its management team.

Now, however, it's backpedaling away from at least one of those strategies. In an interview with the Financial Times, Chairman Karl-Ludwig Kley said he has fallen short of his goal to double the size of Merck's consumer division. Considering global reach to be essential for that unit, he had been aiming to bulk up via acquisition, but high prices on potential deals stymied that approach.

Instead, the company may actually sell off that business, the FT says. "I never exclude any option that makes economic sense," Kley told the newspaper. "With the current pricing environment, I don't see that we could spend billions to double the business to reach critical mass on a global scale."

Selling off Merck's liquid crystal business? Not so much. Despite the fact that drugs and liquid crystals aren't exactly close cousins--and as the FT points out, analysts see them as an awkward fit--Kley likes the division's steady contribution to the bottom line.

- see the FT article