Merck To Sell Consumer Health To Procter & Gamble
Merck KGaA, Germany, the ultimate holding company of Merck Limited announced that it has signed an agreement to sell its global Consumer Health business to Procter & Gamble (P&G) for approximately € 3.4 billion in cash, or approximately $ 4.2 billion at current exchange rates. The transaction, which is expected to close by the end of the fourth quarter 2018, is subject to regulatory approvals and satisfaction of certain other customary closing conditions. Merck intends to use the net proceeds from the divestiture primarily to accelerate deleveraging. At the same time, it will allow Merck to increase flexibility to strengthen all three business sectors.
The transaction will be executed through the sale of Merck's shares in a number of legal entities as well as various asset sales and comprises the Consumer Health business across 44 countries, including more than 900 products and two Consumer Health-managed production sites in Spittal (Austria) and Goa (India). As part of the transaction, it is contemplated that approximately 3,300 employees, mainly from Consumer Health, will transition to P&G upon completion of the transaction, subject to prior works council consultation where required. This includes Merck employees who, through their work, are fully dedicated to Consumer Health, and employees in share deal entities. The sale of the global Consumer Health business does not yet comprise the French Consumer Health business, where P&G has made a binding offer to acquire the shares and assets upon Merck having informed and consulted with the relevant works council representatives. For the Indian business, it has been agreed that P&G will acquire Merck's majority shareholding in Merck Ltd. (India), a publicly traded company, and subsequently make a mandatory tender offer to minority shareholders. As part of the transaction, Merck and P&G have agreed a number of manufacturing, supply and service agreements.