Nestle, Stada prepare bids for Merck

LONDON/FRANKFURT: Swiss food giant Nestle and the private equity owners of German drug firm Stada are both preparing tentative bids for Merck KgaA’s consumer health unit, several sources told Reuters.
Merck’s financial adviser JPMorgan has invited bids for the business, which is valued at about 4 billion euros ($4.8 billion), ahead of a Dec. 15 deadline, the sources said.
Nestle is widely seen as a natural buyer for the maker of Seven Seas vitamins and Bion nutritional supplements, after previous talks to set up a consumer joint venture with Merck fell through over the summer.
Bain and Cinven, who earlier this year took control of Germany’s Stada, are hoping to use the Merck unit as a buy-and-build platform for Stada, which makes generic drugs and consumer care products and had annual revenues of more than 2 billion euros in 2016, the sources said.
The private equity firms are making an opportunistic move on Merck consumer health as they want to have options to build on the business they have with Stada, one of the sources said.
Other buyout funds which do not have a presence in the consumer and healthcare industries and would not be able to use existing portfolio companies as an acquisition vehicle have been advised against entering the process, they said.
Merck, which declined to comment, has seen enough interest from industry buyers, they said, pointing to takeover appetite from emerging markets. Nestle, Stada, Cinven and Bain all declined to comment.