The Procter & Gamble Company (P&G) has signed an agreement to acquire the Consumer Health business of Merck for a purchase price of approximately €3.4 billion.

This acquisition enables P&G to expand its successful consumer health care business by adding a fast-growing portfolio of differentiated, physician-supported brands across a broad geographic footprint. It also provides P&G with strong health care commercial and supply capabilities, deep technical mastery and proven consumer health care leadership that will complement P&G’s existing consumer Health Care capabilities and brands such as Vicks, Metamucil, Pepto-Bismol, Crest and Oral-B.

“We like the steady, broad-based growth of the OTC Health Care market and are pleased to add the Consumer Health portfolio and people of Merck KGaA, Darmstadt, Germany, to the P&G family,” said David Taylor, Chairman of the Board, President and Chief Executive Officer.

P&G’s acquisition of the Consumer Health business of Merck KGaA, Darmstadt, Germany, will improve P&G’s OTC geographic scale, brand portfolio and category footprint in the vast majority of the world’s top 15 OTC markets. These brands provide great solutions 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.

“Over the past few years, our Health Care business has delivered consistent growth and strong shareholder value creation,“ said Steve Bishop, Group President, Global Health Care. “The Consumer Health business of Merck KGaA, Darmstadt, Germany, brings a strong set of brands, products and capabilities, and provides an attractive and complementary footprint to further fuel growth as we continue to grow our existing leading brands.”

The acquisition of the Consumer Health business of Merck KGaA, Darmstadt, Germany, replaces and improves upon the highly successful PGT Healthcare joint venture P&G had with Teva Pharmaceutical Industries, which will be terminated July 1, 2018, pending regulatory approvals.

The PGT Healthcare joint venture delivered disproportionate top- and bottom-line growth and established a major presence in over 50 countries since its formation. However, following a recent review, Teva and P&G concluded that priorities and strategies were no longer aligned and agreed to terms where it would be mutually beneficial to terminate the partnership. PGT product assets will return to their respective parent companies to reestablish independent OTC businesses.

The $1 billion Consumer Health business of Merck KGaA, Darmstadt, Germany, grew 6% over the past two years and provides a broad range of OTC product remedies to relieve muscle, joint and back pain, colds and headaches as well as products for supporting physical activity and mobility. Top brands include Neurobion, Dolo-Neurobion, Femibion, Nasivin, Bion3, Seven Seas and Kytta, along with many others. These are sold primarily in Europe, Latin America and Asia.

“These leading brands and the great employees of the Consumer Health business of Merck KGaA, Darmstadt, Germany, will complement our Personal Health Care business very well,” said Tom Finn, President, P&G Global Personal Health Care. “This acquisition helps us continue to drive sales and profit growth for P&G by providing the capabilities and portfolio scale we need to operate a winning global OTC business on our own, without the aid of a health care partner.”

“The divestment of our Consumer Health is an important step in our strategic focus on innovation-driven businesses within Healthcare, Life Science and Performance Materials. It is a clear demonstration of our continued commitment to actively shape our portfolio as a leading science and technology company,” said Stefan Oschmann, Chairman of the Executive Board and CEO of Merck KGaA, Darmstadt, Germany. “Consumer Health is a strong business that deserves the best possible opportunities for its future development. With P&G we have found a strong, highly recognized player who has the necessary scale to successfully drive the business going forward.”

“P&G’s global scale and strategic interest in the health and well-being of consumers provide an excellent basis for accelerating growth, leveraging our teams’ capabilities and expanding the Consumer Health business profitably. The marketed portfolios, product pipelines and geographic footprints of both businesses are highly complementary,” said Belén Garijo, Member of the Executive Board of Merck KGaA, Darmstadt, Germany, and CEO Healthcare. “With this transaction, we continue to rigorously deliver on our strategy to become a global specialty innovator and bring breakthrough medicines to patients.”

The Consumer Health business of Merck KGaA, Darmstadt, Germany, is active across 44 countries and includes more than 900 products. P&G is targeting to close this deal during the 2018/19 fiscal year, subject to customary closing conditions and regulatory clearances.