Bayer to buy Merck consumer business for $14.2B

Germany's Bayer plans to buy Merck & Co.'s consumer care business for $14.2 billion

RELATED QUOTES

SymbolPriceChange
MRK65.48+0.09
BAYRY115.00+1.71
BAYN.DE108.90+1.70
MRK.DE101.90+0.40
MKGAY35.78-0.07

TRENTON, N.J. (AP) -- Germany's Bayer plans to buy U.S.-based Merck & Co.'s consumer health business, creating a combined medicine cabinet of household names from Bayer's aspirin to Merck's Claritin allergy pills.

The $14.2 billion deal announced Tuesday would vault Bayer AG atop the nonprescription medicine business across North and Latin America. It would make Bayer No. 1 worldwide in skin and gastrointestinal products, a strong No. 2 in the huge cold and allergy category, and No. 3 in pain relievers.

"We are combining two highly complementary businesses with virtually no overlap that will improve our product position over multiple categories," Marijn Dekkers, Bayer's CEO, said on a conference call with journalists.

Merck, widely considered the most research-driven U.S. pharmaceutical company, would divest a slow-growing business it inherited in 2009 when it bought Schering-Plough Corp. to get its experimental prescription medicines.

Bayer, which invented aspirin more than a century ago, already has a major over-the-counter division whose brands include Aleve pain reliever, Alka-Seltzer and One-A-Day vitamins. It would add Merck's Claritin, the Coppertone sun-care line, Dr. Scholl's foot-care products and MiraLAX laxative.

The transaction is part of a recent surge in pharmaceutical industry deals. Some drugmakers are selling or swapping business segments to focus on areas where they have the most expertise, marketing prowess and prospects for growth, as Merck is doing. Others, like Bayer, are making acquisitions to beef up their portfolios of products or experimental drugs to boost future sales.

Merck CEO Kenneth Frazier said in January that he was evaluating options for Merck's consumer and animal health businesses, both units without enough scale to grow quickly. On Tuesday, Merck said it would use the sale proceeds to invest in business areas with the highest growth potential and beef up its drug pipeline with "external assets."

Merck is a different company than Merck KgaA, which is based in Darmstadt, Germany. The American company is known as MSD, for Merck, Sharp & Dohme, outside the U.S. and Canada.

The transaction, expected to close in the second half of 2014, requires regulatory approval. Bayer will borrow money to pay for the deal, which will bring it significant tax savings and about $200 million in savings on marketing and production costs by 2017.

"The extra revenue creates the synergies for us," Dekkers said, adding that the deal "marks a major milestone on our path towards global leadership in the attractive non-prescription medicines business."

Ana Nicholls, a health care analyst at The Economist Intelligence Unit, noted Bayer has offset price-cutting and recession in Europe with a big push into emerging markets.

"It now has a geographical reach that should allow it to take its newly acquired U.S. brands, such as Claritin and Coppertone, and roll them out pretty much worldwide," she added.

Meanwhile, Bayer and Merck also agreed to cooperate on developing and selling drugs in a new class known as sGC modulators, which have potential for treating some heart conditions — long a Merck strength. Merck would initially pay Bayer $1 billion, with up to $1.1 billion in future payments contingent on sales.

The partnership includes a Bayer drug approved in the U.S., Adempas for treating high blood pressure in lung blood vessels. It also features a chronic heart failure drug in midstage patient testing and other experimental drugs in earlier stages of research.

Merck, like other major drugmakers, has seen prescription drug sales slide amid cheap generic competition for several drugs that once raked in billions annually. Those include asthma and allergy pill Singulair, allergy spray Nasonex and blood pressure drugs Cozaar and Hyzaar.

Merck, based in Whitehouse Station, New Jersey, in April reported a 7 percent rise in first-quarter earnings, mainly due to cost cutting across its businesses, including eliminating another 2,000 jobs in the quarter.

In late afternoon trading, Merck shares were down $1.39, or 2.4 percent, at $57.24 in New York. Bayer shares fell nearly 1 percent in Germany.

Dekkers said any layoffs after the deal closes, either in the U.S. or Germany, would not be significant.

"This is not a deal that hinges on job eliminations as a key value driver," he said.

Bayer, based in Leverkusen, Germany, said the combined consumer care business would be based at its new U.S. health care headquarters in Whippany, New Jersey.

Merck's consumer business, based nearby in Summit, New Jersey, has about 2,250 employees. Bayer's consumer business, nearly 2½ times the size of Merck's, has about 8,000 employees.

___

AP reporters David McHugh in Frankfurt, Geir Moulson in Berlin and Tom Murphy in Indianapolis contributed to this story.

___

Follow Linda A. Johnson at www.twitter.com/LindaJ_onPharma

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...

Explore Related Contents

  • Hedge Funds Lose Bid to Quash Fannie, Freddie Profit Grab (3) Bloomberg - 2 hours 1 minute ago

    Perry Capital LLC, the Fairholme Funds and other big investors lost a bid to overturn a judge’s ruling that said they can’t sue the government over the dividend change. The change known as the “net-worth sweep” forced the companies to send almost … More »

  • Vice Said to Hire Bankers to Raise Fund for Scripted Programs Bloomberg - 2 hours 4 minutes ago

    Vice already produces a slew of unscripted shows, from a daily news update for HBO to programs about the culture of marijuana, gay and lesbian issues and food for its own cable network, Viceland. Vice also produces video for services like YouTube … More »

  • Sydney Morning Herald Owner Plans Property Listings Spinoff (1) Bloomberg - 2 hours 8 minutes ago

    Fairfax shares soared the most in three years after it said Domain Group could be listed in Australia by the end of 2017. A separate listing for Domain would put a market value on Fairfax’s biggest profit generator for the first time, while still … More »

  • Macquarie posts 4Q profit Associated Press - 2 hours 13 minutes ago

    The New York-based company said it had profit of 89 cents per share. The investment firm posted revenue of $437.2 million in the period. For the year, the company reported net income of $156.4 million, ... … More »

  • Invesco Mortgage Capital posts 4Q profit Associated Press - 2 hours 16 minutes ago

    On a per-share basis, the Atlanta-based company said it had profit of $2.15. Earnings, adjusted for investment gains, came to 36 cents per share. The real estate investment trust posted revenue of $324.5 ... … More »

  • KAR Auction Services misses 4Q profit forecasts Associated Press - 2 hours 26 minutes ago

    On a per-share basis, the Carmel, Indiana-based company said it had profit of 33 cents. Earnings, adjusted for one-time gains and costs, were 45 cents per share. The results fell short of Wall Street expectations. ... … More »

  • Waste Connections beats Street 4Q forecasts Associated Press - 2 hours 28 minutes ago

    The Vaughan, Ontario-based company said it had profit of 49 cents per share. Earnings, adjusted for one-time gains and costs, came to 68 cents per share. The results beat Wall Street expectations. The ... … More »

  • Morningstar posts 4Q profit Associated Press - 2 hours 32 minutes ago

    On a per-share basis, the Chicago-based company said it had net income of $1.63. Earnings, adjusted for non-recurring gains, were 77 cents per share. The investment research firm posted revenue of $212.2 ... … More »

  • Terex reports 4Q loss Associated Press - 2 hours 33 minutes ago

    On a per-share basis, the Westport, Connecticut-based company said it had a loss of $2.52. Earnings, adjusted for one-time gains and costs, came to 7 cents per share. The results surpassed Wall Street ... … More »

  • Rates mixed at weekly US Treasury bill auction Associated Press - 2 hours 34 minutes ago

    Interest rates on short-term Treasury bills were mixed in Tuesday's auction, with rates on three-month bills declining, while rates on six-month bills rose to their highest level in more than eight years. ... … More »

  • Bsquare reports 4Q loss Associated Press - 2 hours 38 minutes ago

    The Bellevue, Washington-based company said it had a loss of 10 cents per share. The software and engineering services provider posted revenue of $26.8 million in the period. For the year, the company ... … More »

  • ARC Document Solutions posts 4Q profit Associated Press - 2 hours 42 minutes ago

    On a per-share basis, the Walnut Creek, California-based company said it had profit of 6 cents. The provider of document services to businesses posted revenue of $85.9 million in the period. For the year, ... … More »

  • XPO tops 4Q profit forecasts Associated Press - 2 hours 50 minutes ago

    The Greenwich, Connecticut-based company said it had profit of 22 cents per share. Earnings, adjusted for one-time gains and costs, were 24 cents per share. The results surpassed Wall Street expectations. ... … More »

  • QTS Realty reports 4Q results Associated Press - 2 hours 54 minutes ago

    The Overland Park, Kansas-based real estate investment trust said it had funds from operations of $35.4 million, or 64 cents per share, in the period. The average estimate of nine analysts surveyed by ... … More »

  • Business Highlights Associated Press - 3 hours ago

    ____ Deal hunger sends food stocks higher; US indexes at records Stocks again broke records Tuesday as investors came back from a long weekend hungry for deals. While Kraft Heinz and Unilever couldn't ... … More »

  • Whiting reports 4Q loss Associated Press - 3 hours ago

    On a per-share basis, the Denver-based company said it had a loss of 59 cents. Losses, adjusted for non-recurring costs and asset impairment costs, were 28 cents per share. The results topped Wall Street ... … More »

  • Quad/Graphics posts 4Q profit Associated Press - 3 hours ago

    The Sussex, Wisconsin-based company said it had profit of 73 cents per share. The printing company posted revenue of $1.2 billion in the period. For the year, the company reported net income of $44.9 million, ... … More »

  • Global stocks hit record highs, dollar rises on rate-hike view
    Global stocks hit record highs, dollar rises on rate-hike view Reuters - 3 hours ago

    Stock prices across the world climbed to record highs on Tuesday on news euro zone business activity accelerated to a six-year high, while the dollar gained after hawkish comments from Federal Reserve officials. U.S. financial markets were closed … More »

  • Dasan Zhone reports 4Q loss Associated Press - 3 hours ago

    The Oakland, California-based company said it had a loss of 7 cents per share. The communications network equipment company posted revenue of $59.2 million in the period. For the year, the company reported ... … More »

  • Golden Star posts 4Q profit Associated Press - 3 hours ago

    The Toronto-based company said it had net income of 1 cent per share. The gold mining company posted revenue of $53.3 million in the period. For the year, the company reported that its loss narrowed to ... … More »

  • Bristol-Myers Rises After Report That Carl Icahn Owns Stake (1) Bloomberg - 3 hours ago

    Icahn owns a large stake, Dow Jones said, citing people familiar with the matter. It isn’t clear how large the holding is, the news agency said. The shares, which spiked after the report, pared some of the gains and closed up 0.4 percent to $54.78 … More »

  • World stocks mostly grind higher, but HSBC weighs
    World stocks mostly grind higher, but HSBC weighs AFP News - 3 hours ago

    World stocks regained momentum on Tuesday, lifted by rising oil prices and strong eurozone economic data, but a massive earnings drop at banking giant HSBC kept a lid on London and Hong Kong. … More »

  • First Solar Posts Biggest-Ever Loss as Revenue Slides 49% (1) Bloomberg - 3 hours ago

    The largest U.S. solar manufacturer’s fourth-quarter net loss was $719.9 million, or $6.92 a share, compared with net income of $164.1 million, or $1.60 a share, a year earlier, Tempe, Arizona-based First Solar said in a statement Tuesday. … More »

  • Yahoo price slashed as Verizon proceeds with buy
    Yahoo price slashed as Verizon proceeds with buy AFP News - 3 hours ago

    A price cut had Verizon on track Tuesday to go ahead with the purchase of Yahoo's internet business, and share the costs from a pair of epic hacks that threatened to derail the deal. Yahoo slashed the price of its core Internet business by $350 … More »

  • Uber CEO Apologizes for Company Culture After Harassment Claims Bloomberg - 3 hours ago

    (Bloomberg) -- At a meeting open to all Uber Technologies Inc. employees on Tuesday, Travis Kalanick apologized for cultural failings at his company after a former employee alleged she was harassed and discriminated against while working there. … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.24+0.01+4.35%
    N21.SI
    0.405+0.005+1.25%
    E5H.SI
    0.355+0.015+4.41%
    5ME.SI
    0.1060.0000.00%
    5WA.SI
    4.00+0.03+0.76%
    Z74.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.128+0.017+15.32%
    UV1.SI
    0.49+0.03+6.52%
    AWV.SI
    1.31+0.07+5.65%
    5G3.SI
    0.40+0.03+8.11%
    R07.SI
    0.50+0.03+5.26%
    567.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.19-0.05-20.83%
    AZR.SI
    0.54-0.08-12.90%
    AZA.SI
    0.11-0.01-8.33%
    RF7.SI
    0.405-0.030-6.90%
    N01.SI
    0.205-0.015-6.82%
    AXB.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.4192-0.0014-0.10%
    USDSGD=X
    1.4967+0.0003+0.02%
    EURSGD=X
    1.7736+0.0016+0.09%
    GBPSGD=X
    80.0270+0.051+0.06%
    SGDJPY=X
    5.4671+0.0059+0.11%
    SGDHKD=X
    3.1415+0.0042+0.13%
    SGDMYR=X
    9,444.3516-0.06350.00%
    SGDIDR=X
    4.8499+0.0068+0.14%
    SGDCNY=X
    1.0905+0.0005+0.05%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,237.60-1.30-0.10%
    GCJ17.CMX
    18.000.00+0.02%
    SIH17.CMX
    91.73-0.83-0.89%
    ^XAU
    2.740.00-0.07%
    HGH17.CMX
    54.44+0.11+0.20%
    CLJ17.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.92+0.01
    ^FVX
    2.430.00
    ^TNX
    3.04+0.01
    ^TYX