USA manufacturer Proctor & Gamble announced Thursday it will acquire the consumer health unit of pharmaceutical company Merck, in a $4.2 billion deal.
The deal enables the maker of Pepto-Bismol and Crest toothpaste to expand its consumer health care business by adding vitamins and pain medication while extending its geographic reach.More news: Prosecutor to announce Thursday whether charges will be filed in Prince's death
The deal follows GlaxoSmithKline agreeing to buy Novartis out of their consumer healthcare joint venture for $13 billion after dropping its pursuit of Pfizer's consumer unit. It was reported to the sources by initial suitors such as Nestle, Perrigo, and Stada owners Bain and Cinven.
The move allows Merck to focus on its pharmaceuticals unit, as it looks to bolster its pipeline of new drugs amid a wave of key patent expirations.
Zeroing in on the numbers, P&G's net income fell slightly to US$2.5bn or 95 USA cents per share in the three months ended March 31, down from US$2.52bn or US$0.93 in the year-ago quarter.More news: OPCW investigators enter Syrian town of Douma
The German pharma major, which has been looking at various options for the consumer health business since last September, will use the sale proceeds mainly to reduce its debt.
P&G also announced the termination of its PGT Healthcare joint venture with Teva Pharmaceutical Industries, saying its priorities and strategies were no longer aligned with Teva's.
"Consumer Health is a strong business that deserves the best possible opportunities for its future development".More news: Movie previews for mobile Netflix viewers
P&G said in a statement it is maintaining its guidance for organic sales growth in the range of 2%-3% for fiscal 2018 and expects to be at the low end of this range. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.