Generic drug maker Mylan (MYL.O) is in advanced discussions to acquire Merck KGaA’s (MRCG.DE) consumer health business after other bidders failed to meet the German company’s price expectations, people familiar with the matter said.
The precise value of Mylan’s offer could not be established but the sources said the companies were negotiating a price between 3.5 billion and 4 billion euros ($4.3-$4.9 billion).
There is no certainty that Mylan will secure a deal, the sources said, adding that Merck had also been in talks with private equity groups on the asset.
Mylan’s talks with Merck come as other contenders for the business, including Nestle (NESN.S) and Reckitt Benckiser (RB.L) dropped out of the bidding.
The sources asked not to be identified because the deliberations are confidential. Merck declined to comment, while Mylan did not respond to requests for comment.
Consumer health is a fragmented sector ranging from over-the-counter medicines and vitamins to sports nutrition products and condoms.
It has proved fertile ground for deals in recent years, as aging populations and health-conscious consumers drive demand.
But the global consumer health market has slowed, from 4 to 6 percent like-for-like sales growth to zero to 3 percent growth, Morgan Stanley analysts said in December.
Major players in the over-the-counter market have been grappling with pricing pressure stoked by online players such as Amazon (AMZN.O) and private label competitors.
However, buyers and sellers have struggled to agree on deals, as estimates differ over how commoditized many of these products are.
Pfizer Inc’s (PFE.N) sales process for its consumer health business, which it was hoping would fetch as much as $20 billion, has also stalled, sources have said.
Merck’s over-the-counter brands up for sale include Neurobion vitamins and Seven Seas nutritional supplements.