Sales: $582 million for sun and foot care products. Corporate sales: $44 billion. Net income: $4.5 billion.
Key Personnel: Kenneth C. Frazier, chairman and chief executive officer; Robert M. Davis, executive vice president and chief financial officer; Bridgette P. Heller, executive vice president and president, Merck Consumer Care.
Major Products: Sun care—Coppertone (Sport, Water Babies and UltraGuard) and Bain de Soleil sun care products; Skin care—A+D Ointment; Foot care—Lotrimin, Tinactin and Dr. Scholl’s.
New Products: Coppertone Sport AccuSpray, Coppertone Travel Size Continuous Spray, Coppertone Tattoo Guard Continuous Spray, Coppertone Clearly Sheer for Sunny Days and Beach and Pool.
Comments: Sales dipped 3% for sun and foot care products last year. But the big news at Merck is that the company is getting out of the consumer products business in order to focus on its vast pharmaceutical empire. As a result, this is the last year that Merck will appear in The Top 50.
In May, Merck entered into a definitive agreement to sell its consumer care business to Bayer AG for $14.2 billion. Under the terms of the agreement, Bayer will acquire Merck’s existing OTC business, which includes the global trademark and prescription rights for products like Claritin and Afrin, as well as the company’s venerable Coppertone sun care brand, Lotrimin OTC itch products and Dr. Scholl’s foot care. The transaction is expected to close later this year. Bayer will pay for the acquisition with a $14 billion loan from 23 banks.
“Merck Consumer Care is a strong business with a portfolio of well-established product brands, such as Claritin, Afrin and Coppertone, that are leaders in their respective categories,” said Dr. Marijn Dekkers, Bayer AG chairman of the board of management. “The combination of Merck Consumer Care’s complementary portfolio of products and geographic reach with Bayer’s will create a global consumer care business better positioned to serve consumers around the world. We look forward to having the talents of the Merck team, with their track record of innovation, joining our strong Consumer Care team at Bayer HealthCare.”
According to Bayer, the accord, which also includes other pharma-related dealings, will significantly enhance Bayer’s consumer position, propelling it to leadership spots in new categories. Upon completion of the acquisition, Bayer is expected to achieve global leadership positions in dermatology and gastrointestinals, two of the five most important non-prescription health care product categories, and advance to the No. 2 position in the cold, allergy, sinus and flu category. Bayer will remain No. 2 in nutritionals and No. 3 in analgesics.
“We are adding significant scope and earnings power to a business that is already delivering strong margins and stable cash flows,” said Bayer CEO Dr. Marijn Dekkers.
Until that deal is done, Coppertone will keep doing what it does best—protect consumers from UV and warn them when enough is enough. Coppertone kicked off the second year of the Making the Sunscreen Grade program, which empowers parents, teachers and camp counselors to set strong examples for children by integrating healthy sun habits. According to results of an Australian survey, parents who use sunscreen while outdoors with their children increased the odds of their children practicing sun-smart behaviors.