Ranbaxy to bid over $5 billion for Merck Generics

Rex Mathew
09 January 2007

Merck Generics is currently one of the largest generic players globally with annual revenues of €1.8 billion and operating profits of €238 million for 2005. It has a presence in more than 90 countries and is a market leader in Australia, France and Scandinavia in the generics segment.

It has a product portfolio of over 400 drugs across various therapeutic segments and employs more than 5,000 people globally. Merck had merged its US subsidiary Dey Inc with the Generics division in 2004 to strengthen its position in the US market.

Merck had announced its intention to divest Merck Generics last week, possibly to fund other acquisitions. A statement from the company said it has not yet started any discussions with potential buyers. "In light of the far-reaching changes occurring in the market we are considering as an option the divestiture of Merck Generics to a qualified buyer", Merck chairman Michael Roemer was quoted in the statement.

Merck is a leading European pharma and chemicals company with 2005 revenues in excess of €5 billion. US pharma giant Merck & Co was spun off from the German parent in 1917 and the two companies have worked completely independent ever since.

If successful in its bid, Ranbaxy would become one of the top-3 generics companies globally with annual revenues in excess of $4 billion. The company is likely to team up with private equity investors for the bid, as it would be difficult to raise sufficient funds all alone for such a large deal.