BERLIN, April 19 (Xinhua) -- German pharmaceutical- and chemicals producer Merck is selling its business with prescription-free medicines and dietary supplements to U.S. consumer goods corporation Procter & Gamble, the Darmstadt-based company told press on Thursday.
The sale of Merck's fast-growing unit for 3.4 billion euros (4.2 billion U.S. dollars) comes shortly ahead of celebrations to mark its foundation 350 years ago. According to a spokesperson of the DAX-listed firm, 3,300 global employees and 300 staff in Germany would be affected by the transaction.
Merck mainly intends to use the proceeds to reduce its corporate debt burden and expressed hope that the sale could be concluded by the end of 2018, subject to approval of regulatory authorities. Chief executive officer (CEO) Stefan Oschmann first raised the possibility of a sale when he described the prescription-free business as being too small as an individual unit at Merck and announced a desire to focus more on the expensive development of prescription drugs.
"We need to allocate our financial resources very carefully", Oschmann said.
Annual revenue at the prescription-free unit last grew by more than seven percent to 911 million euros in 2017. Nevertheless, the final sales price is below analysts' expectations which had valued the unit at 4 billion euros. Several potential investors, including the global foodstuffs producer Nestle and the consumer goods corporation Reckitt Benckiser initially expressed interest in acquiring the Merck division.
Speaking to press on Thursday, Oschmann said that the unit would "fit excellently" into the portfolio of Procter & Gamble which already includes famous brands such as the laundry detergent, Ariel, the toothpaste blend-a-med and Pampers diapers. Although it was too early to make any definitive statement on the issue, Merck management and labor representatives expressed confidence that the 3,300 employees transferred to Procter & Gamble would not witness a deterioration in their working conditions.
Commenting on the successful purchase, a spokesperson for Procter & Gamble emphasized that the firm had been impressed by the Merck unit's "stable and broad growth." The Cincinnati-based consumer goods corporation employs more than 95,000 staff across the world and total revenue of 65 billion dollars in 2017.
Founded in 1668, Merck is the world's oldest operating pharmaceutical and chemicals producer but has struggled recently with stagnant revenue and falling profit figures. Amongst others, German chancellor Angela Merkel (CDU) is expected to attend a ceremony to mark 350-year-anniversary of the firm in Darmstadt in May.
