Merck KGaA may sell generics business

Germany's Merck KGaA may sell its generic drugs division, according to reports in Handelsblatt citing unidentified sources. The newspaper reported that board approval may already have been given to start looking for a possible buyer.

Merck, which is in the process of a $13.5 billion acquisition of Swiss biotechnology firm Serono (Marketletters passim), may be able to fetch about 4.0 billion euros ($5.6 billion) for the division, the newspaper said, citing its own calculations. Lehman Brothers analysts' current valuation for the generics business is $3.2 billion based on 1.5 times sales for the core generics business (with sales of $1.8 billion).