Merck KGaA Expands Generics In Japan

Merck KGaA of Germany (see also page 6) will acquire the HOEI divisionof Astra Japan, a subsidiary of the Swedish drug company Astra, by the end of this year. The Japanese firm is a generics manufacturer with its own sales and distribution channels. Financial terms of the deal were not disclosed.

Through the acquisition, Merck will establish a new drug company, Merck HOEI, which will employ around 130 staff and have anticipated turnover of 80 million Deutschemarks ($46.8 million) in 1997.

The Japanese pharmaceutical market is valued at around $60 billion, with generics accounting for 7% of this total. Merck noted that the promotion of generics is high on the agenda of Japan's Ministry of Health and Welfare, and sees the acquisition as an important strategic decision to strengthen its global generics network. At the moment, generics represent around 22% of Merck's pharmaceutical sales.