Merck KGaA divests generics segment

Merck KGaA has announced that it is to sell its generic pharmaceuticals business to Mylan Laboratories for the sum of 4.9 billion euros (3.34 billion pounds). The acquisition is set to be finalised in the second half of the year, with the transaction subject to standard regulatory approval.

The generics business of Merck generated revenues of 1.8 billion euros during 2006, a rise of 6.9 per cent over the previous year and accounting for 29 per cent of all sales at the company.

With operations in over 90 countries worldwide, Merck Generics employs almost 5,000 employees and aims to provide affordable treatments through the supply of drugs that are not patent protected.

Dr Karl-Ludwig Klyey, chairman of the executive board of Merck, said: “We are very pleased with the outcome of this process. A combination with Mylan represented the most convincing strategy for our generics business.

“Merck Generics and Mylan ideally complement each other.”

He added that the purchase of this business unit will give the division opportunities for growth and success for its employees – a key factor in the decision to sell Merck Generics to Mylan.

Merck first announced that it was formally investigating the sale of its generics business in January 2007, reporting that the unit required ongoing investment to realise its potential and improve its position in the market.