Procter & Gamble will acquire the consumer health business from German company Merck KGaA in a $4.2 billion deal.
The deal will add Merck’s vitamin and food supplements to P&G’s existing roster of over-the-counter medicines.
Merck’s over-the-counter products generate close to $1 billion in annual sales.
P&G, whose brands include Pampers diapers, Vicks cough and cold products, and Gillette razors, has been suffering from falling revenue. The acquisition of Merck’s products, which include Febimion women supplements, Seven Seas cod liver oil, and Nasivin nasal decongestant, will replace P&G’s joint venture with Teva Pharmaceuticals Industries, which was formed in 2011. P&G’s venture with Teva, whose stock has fallen considerably in recent months, will be terminated on July 1, reports The Wall Street Journal.
The deal comes just months after P&G conceded a board seat to Nelson Peltz after a lengthy battle . Peltz has pushed for the corporation to shift to the acquisition of smaller brands rather than continuing to rely on its historically key brands such as Gillette and Tide.
The Merck deal is one of the biggest recent acquisitions for P&G. Merck put the consumer health unit on the market last year in order to focus its efforts on prescription drugs. The deal is expected to close by the fourth quarter, with the possibility of Merck’s nearly 3,300 consumer health employees moving to P&G.
P&G’s share price has fallen 13% in the past year.