Bayer buys Merck’s consumer care business for $14.2bn

German chemical and pharmaceutical company Bayer has signed an agreement to buy the consumer care business of US-based pharmaceutical company Merck for $14.2bn.

With the transaction, Bayer will become top second company globally in non-prescription of over-the-counter (OTC) products.

Merck’s consumer care business includes brands such as Claritin, Coppertone and Dr. Scholl’s

The pro forma sales of the combined businesses in 2013 totalled $7.4bn, while Merck’s business contributed approximately $2.2bn.

Following the acquisition, Bayer is expected to strengthen its position in dermatology and gastrointestinals, which are two of the five most important non-prescription health care product categories.

Bayer CEO Marijn Dekkers said the acquisition marks a major milestone on the company’s path towards global leadership in the attractive non-prescription medicines business..

"We are adding significant scope and earnings power to a business that is already delivering strong margins and stable cash flows," Dekkers added.

The move will also help Bayer occupy number two position in the nutritionals and number three in analgesics segment.

Bayer HealthCare CEO Olivier Brandicourt said with this transaction, the company is acquiring leading product brands that will make it the OTC leader in North America and Latin America and also move into top global positions in key OTC product categories.

"The strong Bayer brand will help to further leverage the already successful product brands worldwide," Brandicourt added.

"We expect particularly strong growth in key countries outside the US where our superior commercial presence will drive sales of the combined business."

Additionally, Bayer has entered signed co-development and co-commercialisation agreement with Merck for soluble guanylate cyclase (sGC) modulators, for which Merck will make an up-front payment $1bn, with substantial additional sales milestone payments.