MERCK KGAA CONSIDERING SELLING GENERIC BUSINESS

Merck KGaA has confirmed it is considering selling its generic drug manufacturing and marketing division. Last week media reports speculated about a possible sale worth $5 billion, with Teva Pharmaceutical Industries and Novartis' Sansoz named as potential buyers.

"Merck Generics has a strong business with excellent leadership and good growth prospects for the future," Michael Roemer, chairman of the executive board at Merck KGaA, said. "However it will need continued investment to fully realize its potential and strengthen its market presence. In light of the far-reaching changes occurring in the market we are considering, as an option, the divesture of Merck Generics to a qualified buyer."

Merck Generics has locations in Belgium, Italy, Brazil, South Africa, the Netherlands and Spain.

Sources in the generic drug industry speculated that Merck may be looking to reduce debt incurred from a $15 billion acquisition last fall of Serono, a Swiss biotechnology firm. They said having a biotech company like Serono could give Merck the potential to develop pharmaceutical products with longer life cycles than those of generic drugs. Merck Serono was launched yesterday.