The share price of German pharmaceutical company Bayer has slipped today (May 6th) after the company confirmed it has agreed a deal to buy Merck's consumer care business.
Stocks in the US company were down on the back of the news as well, with a statement from Bayer confirming that a deal worth a total of $14.2 billion (£8.4 billion) has been agreed.
Bayer revealed that its US rival is set to separately pay a $1 billion sum over a co-development deal regarding heart failure drugs.
The deal between the two companies coincides with a massive takeover bid by Pfizer, which wants to move forward with proposals for a merger with UK firm AstraZeneca.
"With this transaction, we are acquiring leading product brands," said Bayer HealthCare boss Olivier Brandicourt.
Bayer added in a statement that it expects significant cost savings of around $200 million per year by 2017 to be achieved due to the deal it has been able to strike with Merck over the unit.
The German company also claims increasing its commercial presence, as well as the rolling out of Merck's brands globally, is going to amount to a further $400 million in revenues per year over the course of the next three years.
However, investors did not seem to be impressed, at least initially, by the deal that has been done between the two pharmaceutical companies, with the share price of both firms down today.
By 15:30 BST, stocks in Bayer were down by 0.37 per cent compared to the start of the day, although the value of the shares was still close to the company's 52-week high.
An even larger loss has been sustained by Merck after news of the sale was released, with the share price of the business slipping back by almost two per cent on the New York Stock Exchange by 15:48 BST. Investors will be keeping a close eye on both companies in the coming days to see how markets respond to the deal for Merck's consumer care unit.
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