Merck confirms possible generics business sale
05 January 2007 14:06 [Source: ICIS news]
LONDON (ICIS news)--Merck KGaA said on Friday that it was evaluating the divestment of its generics business but denied it was in talks with potential buyers.
Speculation had mounted following a report in the French press linking drugs major Sanofi-Aventis with the business. Sanofi shares were 2% higher in Friday morning trading, peaking at €71.80.
French newspaper La Tribune had suggested that Sanofi-Aventis was among the companies interested in the unit.
The drugs to liquid crystals maker said disposal of its generics division (Merck Generics) was a strategic option. The business had sales of €1.8bn ($2.4bn) in 2005 and generated operating profits of €238m.
Merck KGaA was unsuccessful in its bid last year to buy German drugs group Schering.
However, later in the year the company struck a deal with the Bertarelli family to acquire biopharmacetuicals maker Serono.
It said that it currently held around 84% of Serono's capital and expected to launch a public tender offer for outstanding holders of bearer shares in the company on 9 January.
The company added that irrespective of its decision on its generics unit, it planned a capital increase of €2-2.5bn in the first quarter.
“Merck Generics has a strong business with excellent leadership and good growth prospects for the future,” said Merck KGaA executive board chairman Michael Roemer.
“However, it will need continued investment to realise its potential and strengthen its market presence,” he added.
($1 = €0.76)
By: Nigel Davis
+44 20 8652 3214
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