Reckitt Benckiser bows out of race for Merck's consumer health arm

UK maker of Cillit Bang says it is no longer in discussions to buy Merck unit, which includes Coppertone and Claritin, leaving Germany's Bayer in poll position

Ibuprofen nurofen
Reckitt Benckiser owns over-the-counter treatments such as Nurofen, Gaviscon and Scholl foot care. Credit: Photo: Rex Features

Reckitt Benckiser has said it is no longer in discussions about buying US pharma group Merck's consumer health business, leaving Germany's Bayer as the leading contender for the $14 billion (£10bn) business.

Rakesh Kapoor, Reckitt Benckiser's chief executive said in a statement: “We are a highly disciplined acquirer with strict return metrics, which we will not break.Reckitt Benckiser has tremendous organic growth opportunities in consumer health as our performance in 2013 and first quarter demonstrate."

"The consumer health market remains highly fragmented and we will continue to evaluate opportunities that fit both our strategic and financial criteria.”

It is understood that Bayer has offered offered to swap its animal health assets for Merck's consumer business and pay the remainder of the price in cash, in a transaction that bears some similarity to GlaxoSmithKline's innovative asset swap with Novartis. A Bayer spokesman declined to comment.

Industry bankers said that Bayer was determined not to lose out to London-listed Reckitt Benckiser in a bidding war again.

The UK consumer business last year trumped its German in a battle to acquire Schiff Nutrition by offering $1.4bn (£877m) which unlocked the British company's access to a $30bn vitamins and nutrition supplements market.