UPDATE 1-Perrigo lines up bid for Merck's consumer health unit -sources

From Reuters - December 14, 2017

LONDON/FRANKFURT (Reuters) - Generic drugmaker Perrigo (PRGO.N) has decided to enter the fray for Merck KGaAs (MRCG.DE) consumer health unit, sources told Reuters, and is preparing an indicative offer for the $4.7 billion business ahead of a deadline on Friday.

Perrigo is expected to face competition from Swiss food giant Nestle (NESN.S) and the private equity owners of German drug firm Stada (STAGn.DE), which are also lining up non-binding offers for the maker of Seven Seas vitamins and Bion nutritional supplements, the sources said on Thursday.

Mercks financial adviser JPMorgan wants to shortlist bidders for the business before the end of the year, they said.

We are entering a very important phase of the decision making process, said Merck KGaAs head of healthcare business, Belen Garijo.

We are looking at all options as we announced in September, she said and declined to comment further. Perrigo declined to comment.

The family-controlled German drugmaker said on Sept. 5 it was exploring options for its consumer health business, which generates about $1 billion a year in sales of over-the-counter medicines and vitamin supplements.

Proceeds from the deal, which is worth about 4 billion euros ($4.7 billion), will help fund research into higher-margin prescription drugs.

Merck initially tapped Nestle to discuss a possible consumer joint venture but it subsequently decided to kick off an auction process, mainly targeting large industry players including Nestle.

Perrigo, which has a market value of $12.1 billion, sees Mercks vitamins and supplements as a good fit for its portfolio of generic and over-the-counter drugs, the sources said.



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