Merck ponders sale of Bracco position

July 7, 1999

After more than 70 years of partnership, pharmaceutical firms Merck of Germany and Bracco of Italy may be ending their alliance. The two companies are discussing whether Merck will sell its sizable stake in Bracco, according to a company statement. Merck

After more than 70 years of partnership, pharmaceutical firms Merck of Germany and Bracco of Italy may be ending their alliance. The two companies are discussing whether Merck will sell its sizable stake in Bracco, according to a company statement. Merck supplies Bracco with key chemicals used in the production of x-ray contrast media, and is believed to hold as much as 50% of the family-owned company.

The companies are debating whether to split the international imaging business from the Italian-based pharmaceutical ethicals, over-the-counter, and laboratory diagnostic products. The companies believe the split would make the businesses more efficient and allow them to better compete on the market.

Bracco and other contrast companies have struggled to weather declining profit margins caused by the erosion in prices for x-ray contrast media. Last year, nearly every major publicly traded contrast media supplier reported that ongoing pricing pressure in the U.S. x-ray market had decreased their profitability (SCAN 6/10/98).