P&G completes acquisition of Merck KGaA’s OTC division

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Procter & Gamble (P&G) has completed its acquisition of Merck KGaA’s Consumer Health business, in a move it hopes will help boost its flagging sales prospects.

As part of the $4.2 billion deal, Merck KGaA’s Consumer Health president & CEO Uta Kemmerich-Keil will join P&G as leader of P&G Personal Healthcare International, an organisation encompassing the newly combined OTC healthcare businesses in Europe, Latin America, and Asia/EMEA.

“This move improves P&G’s OTC geographic scale, brand portfolio and category footprint in the vast majority of the world’s top 15 OTC markets,” the company said in a statement.

P&G has been facing slow sales growth and shrinking profit margins as pricing power for its older brands in the US declines, thanks mainly to online competition and cheaper store-brand products. The deal provides the US firm with several faster-growing brands such as Seven Seas and Neurobion, as well as greater exposure in the Latin American and Asian markets. Overall sales from Merck’s OTC business have grown 6% over the last two years, reaching €911m in 2017.

“Today marks the beginning of an exciting new era for P&G Personal Health Care, as we now move forward to realise the great potential of our combined businesses,” said Tom Finn, President, P&G Global Personal Health Care. “In bringing Merck KGaA, Darmstadt, Germany, Consumer Health into P&G, we have created a new health care organisation that is well-positioned to enable consumers to live longer, healthier and more vibrant lives as well as drive further sales and profit growth for P&G. We are pleased to welcome the strong leadership of Uta Kemmerich-Keil into the P&G family, along with the thousands of talented people of Merck KGaA Consumer Health who are transferring to P&G.”

“P&G’s global scale and strategic interest in the health and well-being of consumers provides an excellent basis for growth and expansion, and we wish our colleagues all the best for the future,” said Belén Garijo, member of the executive board of Merck KGaA and CEO of Merck Healthcare. “This transaction marks a further step in our company’s strategic focus on science and technology.”

The drugs acquired in the deal include products to relieve muscle, joint and back pain, colds and headaches as well as brands for supporting physical activity and mobility. P&G added that the acquisition also provides “strong healthcare commercial and supply capabilities, deep technical mastery and proven consumer healthcare leadership that will complement P&G's existing consumer health care capabilities and brands”.