Merck Sells Generics Business to Mylan Labs

Darmstadt, Germany (May 13)-Mylan Laboratories Inc. (Canonsburg, PA, www.mylan.com) and Merck KGaA (Darmstadt, Germany, www.generics.merck.de) have signed a share purchase agreement under which Mylan will acquire all of Merck’s worldwide operations within Merck Generics, the company’s generics business. The $6.7-billion, all-cash transaction is expected to close later this year, subject to regulatory review. Merck Generics boasts a product portfolio comprising 400 substances, dosage forms, and drug delivery systems.

In a prepared statement, Karl Ludwig-Kley, chairman of the executive board at Merck KGaA said the company will now focus its resources on growing its pharmaceuticals and chemicals business sectors. In 2006 Merck’s generics division accounted for 29% of Merck Group sales and 28% of the Group’s operating result, with sales rising 6.9% in 2006. Merck Generics employs nearly 5000 people worldwide.

Mylan operates through Mylan Pharmaceuticals (generic pharmaceuticals), Mylan Technologies (transdermal patches, generic and brand-name), and UDL Laboratories (supplier of unit dose pharmaceuticals). Mylan also owns a controlling interest in Matrix Laboratories, which produces active pharmaceutical ingredients.

Mylan has stated that it “does not anticipate significant reductions in headcount at Mylan, Matrix, or Merck Generics” as a result of the transaction.