Quartet of US firms line up for Bayer’s $14.2bn acquisition of Merck division

A raft of US firms, including Fried Frank Harris Shriver & Jacobson and Sullivan & Cromwell, have stepped up to advise on the $14.2bn acquisition of Merck’s consumer care business by Bayer.

Merck’s winning bid trumped a number of rival bidders, allowing the German-based pharmaceuticals giant to acquire a range of household consumer products including Coppertone, Dr Scholl’s foot health, and allergy brand Clarityn. It will separately pay $1bn in a co-development deal related to heart failure drugs.

German pharma giant Bayer turned to Sullivan & Cromwell on the acquisition, led by New York-based M&A partner Matthew Hurd.

Meanwhile, Merck has instructed a trio of firms consisting of Fried Frank, Morgan Lewis & Bockius, and Cleary Gottlieb Steen & Hamilton

Fried Frank has taken the lead on M&A for the German business, fielding a team led by M&A co-head David Shine and corporate partner Abigail Bomba. Antitrust partner Peter Guryan assisted, alongside executive compensation and employee benefits partners Amy Blackman and Donald Carleen, IP and technology partner Daniel Glazer, and tax partners Michael Alter and Robert Cassanos.

New Jersey-based Morgan Lewis business and finance partners Alan Leeds, David Glazer and Randall Sunberg led advice to Merck on its additional $1bn cardiovascular treatment deal. They were supported by lawyers including the firm’s antitrust head Scott Stempel, antitrust partner Harry Robin and finance partner Nils Rahlf.

Finally, Cleary’s Brussels office advised Merck on the non-US antitrust aspects of the deal, led by partner Romano Subiotto QC, assisted by associates Katia Colitti, Andrew Leyden and Vladimir Novak.

The transaction comes in the wake of a number of mega-deals in the pharma sector, including Pfizer’s controversial approach for UK firm AstraZeneca which – if successful – would mark the largest-ever takeover of a UK listed company (28 April 2014).

Background to this deal:

Bayer fought off competition from rivals including UK-based pharma giant Reckitt Benckiser Group to acquire the consumer care business from Merck. It is thought that the sale also drew interest from other healthcare giants including Sanofi, Procter & Gamble and Novartis.

On this transaction, both Merck and Fried Frank have turned to longstanding, trusted advisers. Just last year, Matthew Hurd at Sullivan & Cromwell advised Bayer on its $1.1bn cash tender offer for Conceptus, one of the company’s largest North American acquisitions.

Fried Frank’s David Shine is one of Merck’s go-to advisers on big-ticket M&A, having led advice on the company’s $41bn merger with Schering-Plough in 2010 and its $430m acquisition of Inspire Pharmaceuticals the following year.

Allen & Overy has also been known to scoop its fair share of work from Merck in recent years, including its £1.6bn acquisition of Luxembourg incorporated chemicals company AZ Eletronic Materials last year. One of the lead partners on that deal, Frankfurt-based Michael Ulmer, has worked on a number of transactions for the US client (6 December 2013).