P&G to acquire 51.8% stake in Merck in India for 1,290 crore

Team Udayavani, Apr 19, 2018, 3:13 PM IST

New Delhi: Procter & Gamble will acquire 51.80 % stake for 1,289.88 crore in India listed drug firm Merck Ltd as part of a global deal under which it is taking over German firm Merck KGaA’s international consumer health business.

The global deal is for about 3.4 billion euro (27,677 crore) in cash.

P&G will acquire Merck’s majority shareholding in Merck Ltd. (India) and make a mandatory tender offer to minority shareholders.

In a regulatory filing, Merck Ltd said Procter & Gamble Overseas India B.V and The Procter & Gamble Company have launched an up to 647.53 crore open offer to acquire up to 4,315,840 equity shares of Merck Ltd, constituting 26 % stake from public shareholders.

The company also said under the open offer by P&G, up to 26 % of the fully diluted voting equity share capital will be acquired at a price of 1,500.36 per share amounting to 647.53 crore.

On the impact of the global transaction in India, Merck Ltd said: “As part of the transaction, Merck and P&G have agreed to a number of manufacturing, supply and service agreements.”

Merck announced it has signed an agreement to sell its global consumer health business to P&G for approximately 3.4 billion euro in cash, or approximately $ 4.2 billion at current exchange rates.

The transaction will be executed through the sale of Merck’s shares in a number of legal entities as well as various asset sales and comprises the Consumer Health business across 44 countries.).

It is contemplated that approximately 3,300 employees, mainly from Consumer Health, will transition to P&G upon completion of the transaction, subject to prior works council consultation where required .

The sale of the global Consumer Health business does not yet comprise the French Consumer Health business, where P&G has made a binding offer to acquire the shares and assets, it added. The transaction is expected to close by the year end.