German drug giant Merck KGaA considering sale of US$1bn consumer health unit to meet financial targets

US-listed shares of German pharmaceuticals giant Merck KGaA (OTC:MKKGY) were expected to open higher today on news the firm is considering selling its US$1bn consumer health unit to meet its financial targets.

The consumer business — whose brands include nutritional supplements Seven Seas and Bion and decongestant Nasivin – has been seen as lacking critical scale by analysts for a number of years.

Sources told Reuters that the German firm’s management has informally sounded out prospective buyers on numerous occasions over the years, only to be held back by the founding family, which still owns 70% of Merck KGaA and favours a diversified strategy for the drugmaker.

In a statement today, Belen Garijo, chief executive of Merck KGaA’s healthcare business, said: “We expect increasing internal constraints to fund the business to reach the required scale. Fully anticipating this, we are preparing strategic options.”

The statement concluded:  “Any possible proceeds from a potential transaction would be used to deliver on the company’s overall financial targets.”

The German firm is the former parent of NYSE-listed firm Merck and Co. (), albeit when it was first estabilished in the US in 1891, before being nationalised by the US government in 1917 when the country joined the Allies fight against Germany in the First World War. 

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