Merck’s India unit part of German parent’s global sale plans
New Delhi: Merck KgaA is considering selling its global consumer health business, including that of its publicly traded Indian unit Merck Ltd.
The German drug maker is preparing for “strategic options” for its consumer health business globally, including a potential full or partial sale of business, the company’s Indian unit told the stock exchanges in a filing on Tuesday.
“Our consumer health portfolio has been continuously enhanced over the past years. We have maintained a solid position in attractive markets, and demonstrated a pattern of profitable growth. We expect increasing internal constraints to fund the business to reach the required scale. Fully anticipating this, we are preparing strategic options,” Belén Garijo, member of the executive board of Merck KGaA and chief executive of its healthcare business, said in a statement.
The “possible proceeds” from a potential transaction would be used to deliver on the company’s overall financial targets, the company said.
Calling it an important step in executing science and technology focused strategy, the release said that the company is in early stage in the process with no final decision taken as yet.
“We have continued to transform Merck over the past years into a leading science and technology company. Thereby we regularly review our portfolio in the context of our innovation-driven strategy. Healthcare largely focuses on its biopharma pipeline,” said Stefan Oschmann, chief executive of Merck KGaA.
The company said the “strategic initiative” would involve its consumer health business in India as well.
“The implementation of potential measures and their specific design are subject to further analysis and decision-making by competent bodies,” the company said.
Merck KGaA’s global consumer health business achieved net sales of €860 million in 2016, the company release said.
According to Merck Ltd’s 2016 annual report, its consumer health business, which included nutritional supplements Seven Seas and Bion and nasal decongest Nasivin, grew 13-19%.
“Consumer health is running a strong international business with a number of leading products in attractive over-the-counter (OTC) categories. The business focuses on consumer-centric solutions, driven by global mega trends and achieved net sales of €860 million in 2016. With well-recognized and highly respected brands and products such as Bion, Femibion, Nasivin, Neurobion, and Seven Seas, consumer health has a diversified product portfolio and strong market positions both in developed and emerging markets,” said the company’s release.
Merck has shifted towards becoming a science and technology company, with acquisitions such as Sigma-Aldrich, AZ Electronic Materials and Millipore and the divestment of its biosimilars business.
“The ongoing strategic portfolio shift within the healthcare business sector have supported this strategy,” the company release said, citing the recent approvals of Bavencio (Avelumab) in the area of immuno-oncology and Mavenclad (cladribine tablets) for the treatment of highly active relapsing multiple sclerosis as examples of Merck’s successful development of innovative medicines.