Merck KGaA to formally investigate generics sale

Merck KGaA has officially confirmed that it is to investigate the possible sale of Merck Generics, its generic pharmaceuticals business unit.

The company states that it is not currently involved in any discussions with potential buyers of the business division. It added that, irrespective of its analysis of the merits of this potential sale, it will look to make a capital increase of 2-2.5 billion euros (1.35-1.68 million pounds) during the first quarter of the year.

Dr Michael Roemer, chairman of the executive board of Merck, said: “Merck Generics has a strong business with excellent leadership and good growth prospects for the future.

“However, it will need continued investment to fully realise its potential and strengthen its market presence.”

He added that, following large changes in the pharmaceuticals market, the company was considering the strategic option of selling the business unit to a “qualified” buyer.

Merck Generics is the third-largest generic pharmaceuticals business in the world and operates in over 90 countries worldwide. It reported sales of 1.8 billion euros and an operating result of 238 million euros in 2005.

Merck recently announced that it has acquired a majority shareholding on Serono, purchasing the shares of the Bertarelli family, representing 66 per cent of the company’s capital and 76 per cent of its voting rights, resulting in Merck owning 84 per cent of its capital and 89 per cent of its voting rights.