Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.
Thursday, P&G said the two companies had inked a pact that will send Merck’s portfolio from Germany to Cincinnati, Ohio, for €3.4 billion ($4.21 billion). The pair expects to close the deal during the 2018-2019 fiscal year, it said.
The selloff agreement wraps up a sale process the Darmstadt-based drugmaker embarked on last September, pointing to “increasing internal constraints to fund” its consumer health business. And it’s “a clear demonstration of our continued commitment to actively shape our portfolio as a leading science and technology company,” CEO Stefan Oschmann said in a Thursday statement, adding, “With P&G we have found a strong, highly recognized player who has the necessary scale to successfully drive the business going forward.”
P&G, meanwhile, will pick up a $1 billion-by-sales business that’s grown 6% over the past two years and includes more than 900 products across 44 countries. And it’ll also fill a void left by a healthcare joint venture between P&G and Teva, which is set to end July 1.
In selling off its OTC stable, Merck is succeeding where pharma giant Pfizer hasn't so far. With a price tag of some $20 billion in mind for its much larger unit, the New York drugmaker all but struck out after lead bidders Reckitt Benckiser and GlaxoSmithKline bailed. Earlier this month, though, rumors lingered that P&G could still be in the game as Pfizer’s last remaining suitor.