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. Last Updated: 07/27/2016

Merck Sells Off Generic Drug Maker

BERLIN -- German drug maker Merck announced Sunday that it was selling its generic drug business to Mylan Laboratories of the United States for 4.9 billion euros ($6.6 billion).

The deal frees Darmstadt, Germany-based Merck to concentrate on its core pharmaceutical and chemical activities, while allowing Mylan, a generic drug maker based in Canonsburg, Pennsylvania, to expand its product range and global reach.

Merck said the two companies had "signed a share purchase agreement whereby Mylan will acquire all Merck Generics companies throughout the world," and it expects the transaction -- which requires regulatory approval -- to close in the second half of 2007.

Merck said the unit had sales of ?1.8 billion and an operating profit of ?307 million last year.

The sale "will allow Merck to focus its resources on further growth within its pharmaceuticals and chemicals business sectors," the German company's CEO, Karl-Ludwig Kley, said in a statement.

Merck's generic drug division has nearly 5,000 employees, and Kley said its acquisition by Mylan "offers great opportunities for long-term growth and a bright future for the employees" of the unit.

"The fit between our two companies is truly outstanding," said Robert Coury, Mylan's vice chairman and CEO. He said the Merck unit "provides us with leading positions in many of the world's other key regions" to add to Mylan's strong position in the U.S. market.

The deal follows Mylan's recent acquisition of 71 percent of India-based drug ingredient maker Matrix Laboratories for a little over $700 million.