28th Apr 2014 16:38
LONDON (Alliance News) - Reckitt Benckiser Group PLC confirmed that it is in talks with Merck & Co Inc to buy its consumer healthcare unit.
The UK-based consumer goods giant Reckitt Benckiser Group PLC noted that it is part of a competitive process and that there is no certainty as to the outcome of the process.
Earlier Monday, media reports suggested that both Reckitt Benckiser and German conglomerate Bayer AG each offered around USD14 billion or over EUR10 billion for the unit and are said to have emerged as frontrunners in the bid.
Swiss drug giant Novartis AG and the US consumer goods giant Procter & Gamble co. also have interest in the drugmaker's unit, reports stated.
Merck has bundled in this business, amongst others, foot care products by the Scholl's and Coppertone sunscreen brands. The Consumer Health Care division operates businesses in Europe, Latin America, Asia and Africa.
Bloomberg reported that Bayer is exploring a sale of its USD10 billion plastics unit to focus on growing its health business. The report indicated that a sale of the plastics unit would coincide with a push by Bayer to make acquisitions to broaden its drug and lifescience offering. The business may fetch more than 7.8 billion euros or USD10.8 billion including net debt.
In last October, Merck had announced that it is cutting 8,500 positions and targets net reduction in annual operating expenses of around USD2.5 billion by the end of 2015, as it adopts a more flexible cost structure and operating model to respond to business challenges and the changing external environment.
Along with pending, previously announced reductions of 7,500 jobs, this will result in a decrease of about 20% in Merck's total global workforce of 81,000 employees, by the end of 2015.
At that time, Merck also said it plans to allocate resources to areas with highest-potential growth opportunities, such as its anti-PD-1 immunotherapy program for oncology. The firm added that within the core human pharmaceutical and vaccine business, it will continue to support its in-line portfolio and prepare for promising launches in the pipeline.
Reckitt Benckiser shares closed down 2.3% at 4,844.52, making it one of the FTSE 100's biggest losers on Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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