April 19, 2018

Merck, a leading science and technology
company, announced today that it has signed an agreement to sell its global
Consumer Health business to Procter & Gamble (P&G) for approximately € 3.4 billion
in cash, or approximately $ 4.2 billion at current exchange rates. The transaction,
which is expected to close by the end of the fourth quarter 2018, is subject to
regulatory approvals and satisfaction of certain other customary closing conditions.
Merck intends to use the net proceeds from the divestiture primarily to accelerate
deleveraging. At the same time, it will allow Merck to increase flexibility to
strengthen all three business sectors.

“The divestment of the Consumer Health business is an important step in Merck’s
strategic focus on innovation driven businesses within Healthcare, Life Science and
Performance Materials. It is a clear demonstration of our continued commitment to
actively shape our portfolio as a leading science and technology company. The
attractive price reflects the high asset value and the performance Consumer Health
has delivered,” said Stefan Oschmann, Chairman of the Executive Board and CEO
of Merck. “Consumer Health is a strong business that deserves the best possible
opportunities for its future development. With P&G we have found a strong, highly
recognized player who has the necessary scale to successfully drive the business
going forward.”

“P&G’s global scale and strategic interest in the health and well-being of consumers
provide an excellent basis for accelerating growth, leveraging our teams’ capabilities
and expanding the Consumer Health business profitably. The marketed portfolios,
product pipelines and geographic footprints of both businesses are highly
complementary,” said Belén Garijo, Member of the Executive Board of Merck and
CEO Healthcare. “With this transaction, we continue to rigorously deliver on our
strategy to become a global specialty innovator and bring breakthrough medicines
to patients.”

“We like the steady, broad-based growth of the OTC healthcare market and are
pleased to add Merck’s Consumer Health portfolio and people to the P&G family,”
said David Taylor, P&G Chairman of the Board, President and CEO.
“These leading brands and the great employees of Merck’s Consumer Health
business will complement our Personal Health Care business very well,” said Tom
Finn, President, P&G Global Personal Health Care. “This acquisition helps us continue
to drive sales and profit growth for P&G by providing the capabilities and portfolio
scale we need to operate a winning global OTC business.”

Between 2015 and 2017, Consumer Health’s net sales grew organically by 6%,
outpacing the consumer health market’s growth of approximately 4% over the same
period. For the full year 2017, net sales of the Consumer Health business amounted
to € 911 million.

The transaction will be executed through the sale of Merck’s shares in a number of
legal entities as well as various asset sales and comprises the Consumer Health
business across 44 countries, including more than 900 products and two Consumer
Health-managed production sites in Spittal (Austria) and Goa (India). As part of the
transaction, it is contemplated that approximately 3,300 employees, mainly from
Consumer Health, will transition to P&G upon completion of the transaction, subject
to prior works council consultation where required. This includes Merck employees
who, through their work, are fully dedicated to Consumer Health, and employees in
share deal entities. The sale of the global Consumer Health business does not yet
comprise the French Consumer Health business, where P&G has made a binding

offer to acquire the shares and assets upon Merck having informed and consulted
with the relevant works council representatives. For the Indian business, it has been
agreed that P&G will acquire Merck’s majority shareholding in Merck Ltd. (India), a
publicly traded company, and subsequently make a mandatory tender offer to
minority shareholders. As part of the transaction, Merck and P&G have agreed a
number of manufacturing, supply and service agreements.
In September 2017 Merck announced that it was preparing strategic options for its
Consumer Health business, including a potential full or partial sale of the business
as well as strategic partnerships.

J.P. Morgan acted as financial adviser to Merck on the transaction, and Freshfields
Bruckhaus Deringer acted as a legal adviser to Merck.

About Merck
Merck is a leading science and technology company in healthcare, life science and performance materials.
Almost 53,000 employees work to further develop technologies that improve and enhance life – from
biopharmaceutical therapies to treat cancer or multiple sclerosis, cutting-edge systems for scientific
research and production, to liquid crystals for smartphones and LCD televisions. In 2017, Merck
generated sales of € 15.3 billion in 66 countries.
Founded in 1668, Merck is the world’s oldest pharmaceutical and chemical company. The founding family
remains the majority owner of the publicly listed corporate group. Merck holds the global rights to the
Merck name and brand. The only exceptions are the United States and Canada, where the company
operates as EMD Serono, MilliporeSigma and EMD Performance Materials.


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