(Adds background on Merck auction)
By Arno Schuetze and Olivia Oran
FRANKFURT/NEW YORK, April 29 Bayer AG
is offering to swap its animal health assets for Merck & Co
Inc's consumer healthcare business, people familiar with
the matter said on Tuesday, in a move that could give the German
drugmaker a leg up in the $14 billion auction of the Merck
As part of its bid, Bayer has offered to pay the remainder
of the acquisition price in cash, these people said, who asked
not to be named because the matter is not public.
Bayer and Britain's Reckitt Benckiser Group are among
the final contenders for the Merck unit, best known for
Coppertone sunscreen and Claritin allergy medicine, Reuters
reported last weekend.
Bayer's animal health business had net sales of 1.3 billion
euros ($1.8 billion) in 2013, according to the company's
website. Representatives for Bayer declined to comment and Merck
did not respond to requests for comment.
Bayer's asset swap offer is yet another evidence of
drugmakers' efforts to exit weaker businesses and focus
resources on areas of strength.
Last week, Novartis and GlaxoSmithKline Plc agreed
to trade more than $20 billion worth of assets, with Eli Lilly
and Co buying Novartis' animal health business for $5.4
However, asset swaps are often complicated and hard to value
and there is no guarantee Bayer's offer will prevail over cash
offers from rival suitors, people familiar with the matter said.
Merck's auction has also drawn interest from several other
healthcare and consumer giants including Boehringer Ingelheim,
Sanofi SA, Procter & Gamble Co and Novartis AG
, Reuters previously reported.
A sale of Merck's consumer business could approach $14
billion with an outcome expected this week, sources said last
Reckitt confirmed on Monday it was in talks to buy the Merck
unit. Bayer's Chief Executive Marijn Dekkers said on Monday
during a conference call with analysts that OTC "is an important
business for us."
Reckitt owns over-the-counter medicines, including Mucinex
and Nurofen and the international rights for the Scholl foot
care business. Germany's Bayer has a strong portfolio of
consumer products, including pain medication Aleve and antacid
(Reporting by Arno Scheutze in Frankfurt and Olivia Oran in New
York,; additional reporting by Soyoung Kim in New York and
Sophie Sassard in London; Editing by Leslie Adler and Phil