Merck Eyes $15bn-Plus Drug Sale Amid Pharma M&A Revival

US pharma giant Merck is looking to divest a large portfolio of mature drugs and a sale could rake in over $15bn.

Merck, which is close to selling its consumer health unit for about $14bn (£8.3bn, €10.1bn), is working with an investment bank on the likely sale of the off-patent drugs.

The drugs are known as 'diversified brands' and many are sold in emerging markets.

Generic drugmakers are expected to show interest in Merck's off-patent drugs portfolio, unnamed sources told Reuters.

Pursued by the news agency, Merck refused to comment.

In Britain, drug maker GlaxoSmithKline's chief executive Andrew Witty said on 30 April that he would mull over single product sales or broader divestiture of the firm's established drugs.

Elsewhere, Sanofi, France's largest drugmaker, is also looking to offload a portfolio of mature drugs and a sale could rake in between $7bn and $8bn.

Sanofi, being advised by Evercore Partners, has tapped potential buyers over the past few months, Reuters reported on 30 April.

Drug companies are increasingly looking to ditch smaller divisions they view as non-core because they want to focus more on their core products.

Pharma firms are also open to large asset swaps with rivals, to exit weaker businesses and bolster their core areas where they are already leading players.

Hectic Deal Making

Merck's latest interest comes amid a rush of deal making, particularly in the health care sector.

On 28 April, US-based Pfizer and UK-based AstraZeneca confirmed media reports that they had discussed a possible merger of the companies in a cash and stock deal, valuing AstraZeneca at about £60bn ($100bn) or £46.61 per share.

Last week, announced deal volume the worldover crossed $1tn for the year. That made this the fourth-quickest year to cross the trillion-dollar mark and the fastest since 2007, according to Dealogic data.

Pharma M&A

Last week, Canada's Valeant Pharmaceuticals International announced its bid to buy US-based rival Allergan for some $46bn.

Meanwhile, Basel-based Novartis traded $20bn worth of assets with Brentford-based GlaxoSmithKline Pharmaceuticals and also agreed to sell its animal health arm to US-based Eli Lilly.