Bayer plans to buy Merck & Co.'s consumer health business for $14.2 billion, a deal that would expand the German drug maker's range of over-the-counter medications.
The deal, announced Tuesday, would give Bayer control over popular household brands such as Claritin, Coppertone and Dr. Scholl's. The pharmaceutical company would also seize the No. 2 spot in the world for nonprescription drugs.
"This acquisition marks a major milestone on our path towards global leadership in the attractive nonprescription medicines business," Bayer Chief Executive Marijn Dekkers said in a statement.
On Tuesday, Bayer also said it had agreed to a strategic collaboration with Merck to develop and commercialize medications for cardiovascular diseases. As part of the deal, Merck will pay Bayer $1 billion upfront and as much as $1.1 billion for hitting sales milestones.
Bayer, combined with Merck's consumer health business, brought in sales of $7.4 billion in 2013, Bayer said. Once the two sides are fully integrated, the company expects annual cost savings of $200 million by 2017.
The deal, which requires regulatory approval, is expected to close in the second half of 2014. Part of the purchase price includes a payment related to sales of Claritin and Afrin in countries where these medications are still prescription only.
Shares of Merck dropped $1.52, or 2.6%, to $57.11 on Tuesday. Bayer fell $1.07, or 0.8%, to $137.88.Copyright © 2014, Los Angeles Times