P&G has signed an agreement to acquire the Consumer Health business of Merck, Darmstadt, Germany. Credit: Business Wire.

Procter & Gamble (P&G) has entered an agreement to take over Merck’s consumer health unit for about €3.4bn ($3.8bn), boosting its current consumer health care business.

In addition to a diverse portfolio of brands, the deal will add commercial, technical and supply capabilities to P&G.

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It will also expand the company’s geographic footprint for its over-the-counter drug brands, including Vicks, Metamucil, Pepto-Bismol and Crest.

P&G Global Health Care group president Steve Bishop said: “Over the past few years, our Health Care business has delivered consistent growth and strong shareholder value creation.

“The consumer health business of Merck brings a strong set of brands, products and capabilities, and provides an attractive and complementary footprint to further fuel growth as we continue to grow our existing leading brands.”

The company’s PGT Healthcare business is a joint venture (JV) with Teva Pharmaceutical. The latest purchase of Merck’s subsidiary will replace the JV, which is set to be terminated on 1 July 2018.

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“The consumer health business of Merck brings a strong set of brands, products and capabilities, and provides an attractive and complementary footprint to further fuel growth.”

Merck said that the divestiture will enable it to focus on its healthcare, life science and performance materials businesses.

The company will primarily utilise the net proceeds from the transaction to reduce its debt.

Merck executive board member and Healthcare CEO Belén Garijo said: “With this transaction, we continue to rigorously deliver on our strategy to become a global specialty innovator and bring breakthrough medicines to patients.”

The acquisition is subject to regulatory approvals and other customary closing conditions but is expected to be completed by the end of this year.

Merck’s  consumer health unit produces more than 900 products throughout 44 countries. In 2017, the business recorded €911m net sales.