Merck & Co mulls sale of consumer healthcare, animal health businessess

Merck & Co Inc, the second largest drug maker in the US, is reported to have received interest from large consumer firms for its consumer healthcare business, a sale that may fetch it between $8 billion to $10 billion.

Citing people familiar with the matter, Reuters yesterday reported that the New Jersey-based company, which is being advised by Morgan Stanley, is considering alternatives for both its consumer and animal health businesses and expects to complete the review in 2014.

Earlier media reports had said that among a range of options it has considered for the consumer unit is swapping the business for the animal health and other units of its Swiss rival Novartis AG.

But such a move is unlikely since the complexity of valuing different businesses is enormous, prompting Merck to explore an outright sale of its consumer unit, the report said.

Companies that may be interested in the business could be consumer giants like Reckitt Benckiser Group and Procter & Gamble Co, the report added, citing analysts.

Merck & Co's consumer healthcare unit is best known for its allergy medicine Claritin, Coppertone sunscreen protection range, Dr Scholls footcare products, constipation treatment MiraLax, and Oxytrol – the first over-the-counter treatment for overactive bladder in women.

For its larger animal health businesses, Merck & Co may spin-off the unit just like Pfizer Inc, which last year spun off its animal health unit as a separate publicly traded company called Zoetis.

Merck & Co's animal health unit is the world's second largest after Zoetis.

Merck & Co's profit declined last year due to generic competition to its top-selling drug Singulair, and an inability to introduce new drugs after research setbacks.

The drugmaker has been axing thousands of jobs even as it looks to boost demand for existing products to overcome the loss of revenue from Singulair Maxalt and Temodar.

According to analysts, investors are looking for Merck to restructure and perhaps sell off non-pharmaceutical units.

Last year it sold some of its active pharmaceutical ingredients to Aspen Pharmacare, South Africa's biggest pharmaceutical company.