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Bayer and Roche plan OTC merger in US

Bayer, the German drugs and chemicals group, plans to merge its US over- the-counter drugs operation with Swiss rivals Roche. The deal, Bayer said, would add at least $200m (pounds 129m) to its OTC business next year.

The merger, unveiled yesterday, involves the formation of a 50-50 joint venture to market non-prescription analgesics and women's health formulations. The combined entity is expected to have sales of $275m in its early years, although Bayer's asprin will not be sold by the new entity.

It is just two years since Bayer paid SmithKline Beecham $1bn to buy back the right to use its brand name in North America, seized by the US government during the First World War. Bayer will handle sales and marketing in the venture, which the German group claimed would now be a contender for third place amongst over-the-counter groups in US "and will compete even more significantly in the US OTC analgesic market''.

That market is estimated to be worth around $12.5bn or a quarter of the world's total. Growth is being propelled by the trend to "self-medication" and the desire by insurance companies and governments to cut health costs.

The venture will include Roche's Aleve analgesic and Femstat 3 for vaginal yeast infections, which Bayer said would add at least $200m to sales of its US consumer care division worth $600m in 1995. Bayer products to be sold by the new venture will include Actron and Vanquish analgesics, Midol menstrual pain reliever and Mycelex-7 vaginal yeast infection treatment. Other big Bayer brands such as Alka-Seltzer, Alka-Seltzer Plus, One-A- Day and Flintstones vitamins will be excluded from the deal.