P&G to Acquire Merck Consumer Health Business, Including Vitamin and Dietary Supplement Brands in Europe, Asia, and Latin America


P&G will acquire Merck vitamin brands like Femibion women’s health supplements and Seven Seas omega-3 fish oil.

Photo © Procter & Gamble

Procter & Gamble (P&G; Cincinnati) said today that it plans to acquire the consumer healthcare business of Merck KGaA (Darmstadt, Germany) for $4.2 billion. P&G will buy Merck over-the-counter OTC (OTC) dietary supplement brands such as Femibion women’s health supplements, Seven Seas omega-3 fish oil, and Bion 3 immune-health supplements. The Femibion brand includes supplements for prenatal support, such as folic acid. These will join P&G’s own OTC supplement lineup, which includes the Align probiotics and Metamucil brands for digestive support, as well as New Chapter supplements.

P&G, whose other OTC consumer healthcare brands include Pampers, Vicks, Crest, and Gillette, has seen struggling sales and falling share price in part due to growing competition from online and other retailers. It now looks to the Merck portfolio to help drive success. The Merck consumer healthcare brands generate nearly $1 billion in annual sales and grew 6% in the past two years.

Merck’s OTC consumer health portfolio is largely concentrated in Europe, Latin America, and Asia. In a press release, P&G said the Merck acquisition will strengthen P&G’s global presence in health areas the company wasn’t as strong in. P&G said the deal “will improve P&G’s OTC geographic scale, brand portfolio, and category footprint in the vast majority of the world’s top 15 OTC markets. These brands provide great solutions in relieving muscle, joint and back pain, colds and headaches, as well as supporting physical activity and mobility, many of which are treatment areas not currently addressed in P&G’s portfolio.” Merck will continue to focus on its pharmaceutical business.

Market researcher Euromonitor notes that, in 2017, P&G was the ninth largest global consumer health corporation in terms of retail value. “This deal makes sense for P&G on two fronts,” Matthew Oster, head of consumer health research at Euromonitor, tells Nutritional Outlook. “First, it allows P&G to diversify its consumer health portfolio geographically, as Merck KGaA has well-built presence across Europe, Asia, and Latin America, whereas almost half of P&G’s consumer health sales fall just in the U.S. It also makes sense to expand P&G’s portfolio from pure OTC towards the faster-growing vitamins and dietary supplements categories where Merck KGaA plays most directly; more than three-quarters of Merck’s global sales come in the form of vitamins and dietary supplements, while more than 80% of P&G’s consumer health sales fall in OTC. This will allow P&G to take advantage of changing consumer trends around healthy living that are driving interest in vitamins and dietary supplements and will give them a competitive boost in diversifying away from a pure OTC portfolio.”

The Merck deal replaces the healthcare joint venture P&G established with Teva Pharmaceutical Industries (Jerusalem, Israel) in 2011, called PGT Healthcare, which focused primarily on consumer healthcare sales in all markets outside of North America. The companies plan to terminate the joint venture this July, with P&G stating that the companies’ “priorities and strategies were no longer aligned.”

In a press statement, Tom Finn, president, P&G Global Health Care, said, “This acquisition helps us continue to drive sales and profit growth for P&G by providing the capabilities and portfolio scale we need to operate a winning global OTC business on our own, without the aid of a healthcare partner.”

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