India impact of P&G’s global acquisition of Merck’s consumer healthcare biz

Procter & Gamble (P&G) has acquired the consumer health business of German pharmaceuticals company Merck KGaA across 44 countries, including India, for about $4.2bn. Merck wants to focus on healthcare, life science and performance materials businesses.

As a result of the acquisition P&G will acquire brands like Femibion, Neurobion, Nasivin and Seven Seas (as a part of Merck’s consumer healthcare business) and add capabilities and portfolio scale in the global OTC business.

Impact on Indian entities

As a part of this deal, P&G has signed an agreement to acquire 51.8 per cent equity stake in Merck’s Indian arm, Merck Ltd from three promoters – Emedia Export Company MBH , Merck Internationale Beteiligungen GmbH and Chemitra GmbH. The transaction is proposed at Rs 1,500 per share (total cost of Rs 1,290 crore).

This global transaction has also triggered an open offer. Accordingly, P&G is offering to buy 43.16 lakh public shares (26 per cent of the total equity)  from Merck Ltd. constituting 26 per cent of equity share capital of the company at Rs 1,500.36/share. If the open offer is completed then Rs 647.53 crore will be paid in in cash. The transaction is expected to close by the December 2018 end.

Founded in 1668, Merck is the world’s oldest pharmaceutical and chemical company.  It has been in operational in India since 1967, in areas including diagnostics and prescription drugs, OTC brands.

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