Merck selling sites and options to African firm

Merck & Co. Inc.'s world headquarters is in Whitehouse Station, N.J. (Mel Evans / Associated Press)
Merck & Co. Inc.'s world headquarters is in Whitehouse Station, N.J. (Mel Evans / Associated Press)
Posted: June 29, 2013

Drugmaker Merck & Co. Inc. has agreed to sell manufacturing and related sites and options on several products to Aspen Pharmacare Holdings for about $1 billion, the largest divestiture for Merck since 2009.

The manufacturing sites, employing about 960 people, are in the Netherlands. Merck facilities in Sioux City, Iowa, and Des Plaines, Ill., employ a total of 20 people and also will shift to Aspen. The 11 products had $248 million in 2012 sales, mostly in Latin America and East Asia.

Like other large brand-name pharmaceutical companies, Merck - based in Whitehouse Station, N.J., with a large operation in West Point, Montgomery County - has been trying to cut costs to maintain profit levels in the face of increased competition from cheaper generic drugs and pressure from insurers to reduce prices. This week, Pfizer Inc. completed the spin-off of its animal-health unit, Zoetis.

Of the Aspen deal, Merck spokeswoman Lainie Keller said in an e-mail: "The agreement allows the company to refocus critical resources to bringing innovative new medicines to more customers and patients around the world and to driving company growth."

Dutch drugmaker Organon previously owned the Netherlands sites and the Iowa facility. Schering-Plough bought Organon in 2007; Merck bought Schering-Plough in 2009.

Aspen is Africa's largest drugmaker. Its parent, Aspen Group, has headquarters in Durban, South Africa. The company is trying to grow through acquisitions and sell more of its brand-name and generic medicine in emerging markets.

On June 18, GlaxoSmithKline said it received an unspecified offer from Aspen to buy a French factory and anti-blood-clotting medications made there.

In a statement, Aspen said the Merck facilities would help with the Glaxo acquisition if it is completed.

"One of Aspen's primary strategic intents," Stephen Saad, chief executive, said in a statement, "is to further globalize its business, increase its representation across a number of additional territories, and provide support to its growing global presence with a differentiated pipeline."


Contact David Sell

at 215-854-4506 or dsell@phillynews.com, or

follow on Twitter @phillypharma. Read his blog at www.inquirer.com/phillypharma.

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