Procter & Gamble Looks Ahead to Merck KGaA Acquisition

Procter & Gamble (P&G) announced last month that it has agreed to acquire Merck KGaA’s consumer health unit for 3.4 billion euros or about $4.2 billion.¹

The purchase is a sign of the company’s commitment to be a leader in the consumer health market, according to Velvet Gogol Bennett, P&G’s global health care communications director.

“The acquisition of Merck KGaA Consumer Health Care enables P&G to improve our PHC geographic scale, brand portfolio, and category footprint in all of our regions and in the vast majority of the worlds’ top 15 OTC markets by adding a fast-growing portfolio of differentiated, physician-supported, multi-region brands,” she said in an interview. “It also provides us with strong health care commercial and supply capabilities, deep technical mastery and proven consumer health care leadership that will complement our own OTC capabilities, brands, and leadership.”

Bennett also said that the complimentary brands and capabilities of Merck KGaA would allow P&G to continue its growth, particularly in areas in which the 2 businesses previously competed.

“We see many opportunities for Merck capabilities to enhance P&G’s brands, and we think some of our P&G capabilities, investment, and experience can help grow Merck’s brands even further and faster,” Bennett said. “In addition, Merck’s portfolio includes a broad range of OTC products in relieving muscle, joint and back pain, colds and headaches, as well as supporting physical activity and mobility, many of which are treatment areas not currently addressed in P&G’s portfolio today.”

Although Merck KGaA does not do business in the United States, Bennett expressed confidence that P&G’s purchase of the Germany-based consumer health unit would prove beneficial to North American patients and consumers.

“This acquisition brings to P&G a large stable of technologies that could be applied to new or existing brands in our current North America portfolio,” she said. “This, coupled with our already strong plans behind the respiratory, sleep, and digestive businesses, ensures that our innovation pipeline will be dynamic in the years to come and continue to benefit people who buy the brands they trust.”

Bennett noted that integration and transition planning is already under way, adding that the 2 companies will operate independently until the deal closes.

The transaction is expected to be completed in the fourth quarter of 2018, according to a company statement.¹

References

Burger L. P&G to buy German Merck's consumer health unit for $4.2 billion. Reuters. reuters.com/article/us-merck-m-a-p-g/pg-to-buy-german-mercks-consumer-health-unit-for-4-2-billion-idUSKBN1HQ0EJ. Published April 19, 2018. Accessed May 1, 2018.