Johnson & Johnson and Merck & Co., Inc. announced that they have signed a definitive agreement for Johnson & Johnson to buy Merck's 50 per cent equity stake in their European non-prescription pharmaceuticals joint venture known as Johnson & Johnson • MSD Europe. Financial terms were not disclosed.

Once completed, the acquisition will give Johnson & Johnson 100 per cent ownership of the European joint venture business. Johnson & Johnson • Merck Consumer Pharmaceuticals Co., a 50/50 joint venture between Johnson & Johnson and Merck that operates in the US and Canada, is unaffected by this transaction.

The new entity will build upon the success of the European joint venture by continuing to grow the current Merck over-the-counter (OTC) switch products marketed by the joint venture and expanding operations to other European countries. As part of this continuing relationship, the companies anticipate the launch of an OTC version of Merck's prescription cholesterol-lowering drug ZOCOR (simvastatin) in the United Kingdom in mid-2004, pending regulatory approval.

"Through this acquisition, we will be able to establish a single, pan-European consumer pharmaceutical company that will be well-positioned to benefit from the changing European market for non-prescription pharmaceuticals," said Brian Perkins, worldwide chairman, Consumer Pharmaceutical and Nutritionals, Johnson & Johnson. "This represents an evolution of our successful partnership with Merck in Europe, which since its inception in 1991 has become one of the region's leading non-prescription companies."

"A strategic review of the European business by both partners highlighted the opportunity for Johnson & Johnson to enhance its position in Europe, while providing Merck with the full and fair value for its share in our European non-prescription pharmaceuticals joint venture," said Judy Lewent, president, Human Health-Asia at Merck. "In addition to the upfront consideration, as Johnson & Johnson leverages and expands the OTC business into other European countries, Merck will continue to benefit through royalties on certain products. Merck has also regained the rights to potential future Rx-to-OTC switch products in Europe."

Johnson & Johnson • MSD Europe - which includes Laboratoires Martin-Johnson & Johnson-MSD SAS in France, Woelm Pharma GmbH & Co. in Germany, Centra Medicamenta Srl. in Italy, Abello Farmacia S L in Spain, and Johnson & Johnson • MSD Consumer Pharmaceuticals in the U.K. - will become a wholly owned subsidiary of Johnson & Johnson upon completion of the acquisition.

The transaction is subject to a competition review by the European Commission and other customary closing conditions.