Nestle pulls out of bid to buy Merck’s consumer health business

Nestle S.A. has reportedly withdrawn from its bid to buy out the consumer health business of Merck KGaA, the renowned manufacturer of Seven Seas Vitamins. Sources state that Nestle pulled out of the negotiation process with Merck post the supposed demand of nearly USD 4.99 billion that Merck put forward. Earlier in 2017, some of the key officials of Merck had made an announcement to sell the firm’s consumer healthcare division worth nearly USD 1 billion for funding its research activities to develop new drugs. Apparently, other pharma firms such as Pfizer have also displayed their interest in the purchase of the Merck’s healthcare unit.

Post discussions about Nestle entering a joint venture with Merck, speculations about Nestle being a buyer of Merck’s consumer health segment were being made across the pharma circles. However, one of the key sources claimed that the talks failed to yield any positive outcomes, since Nestle’s investors had been discouraging the firm to purchase Merck’s business. As per another reliable source, the deal had resulted in a failure on the grounds that Nestle did not agree with Merck on the price, which Merck estimated 20 times higher than the core valuation of its consumer healthcare segment.

Consumer health, as on today, is one of the latest emerging sectors, inclusive of over-the-counter medicines, condoms, sports nutrition, and vitamins. Records provide evidence to the fact that perpetually massive deals have taken place across the consumer healthcare industry in recent years, with the geriatric population and the health-conscious consumer base fueling the market demand. Nestle also seemed to be traversing on similar lines of manufacturing healthy and nutritious food & beverage products. On these grounds, the firm may have put forth a proposal to acquire the consumer health business of Merck in November last year, state experts. Despite being shortlisted by Merck to submit its final bid this year however, Nestle seems to have finalized its exit from the bid, driven by price constraints.

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Dhananjay Punekar

Dhananjay develops content for Market Size Forecasters. A post graduate in mathematics as well as business administration, he worked as a process executive in Infosys BPO Limited before switching his professional genre. Following his childhood passion, he opted for a career in writing and now pens d...

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