P&G wins the race for Merck’s consumer health business

When it became public in September 2017 that Merck was carrying out a strategic review of its consumer health business with a view to potentially selling it all, or certain parts of it, a number of companies were quickly linked as potential suitors. These initially included Nestlé, Perrigo, and the private equity firms Bain and Cinven, with Reckitt and Mylan stepping in at the beginning of 2018 when Perrigo and the PE players stood back.

The announcement that Proctor & Gamble has won the race to acquire the healthcare business via an offer worth USD 4.2bn seems to have caught most of the watching world unawares until it was formally announced later during the day on the 19th.

The acquisition will enable P&G to add vitamins and food supplements to its existing range of over-the-counter products, with household brands such as Seven Seas, Pepto-Bismal and Vicks decongestant being added to its stable of brands that includes Gillette and Pampers.

P&G has been heavily criticised in the last few months by one its newer board members, Nelson Pelzt, the activist investor who felt the company was not reacting quickly enough to changes in consumer tastes, so this deal might help to settle his grumbles.