(Reuters) - Procter & Gamble Co agreed to acquire the consumer health business of German pharmaceuticals company Merck KGaA for about 3.4 billion euros ($4.21 billion) in cash, the companies said on Thursday.

FILE PHOTO - The logo of Dow Jones Industrial Average stock market index listed company Procter & Gamble (PG) is seen on a tube of toothpaste in Los Angeles, California, United States, April 25, 2016. REUTERS/Lucy Nicholson

P&G said the acquisition will enable it to expand its portfolio of consumer healthcare capabilities and brands. Merck’s consumer health unit includes brands such as Femibion, Neurobion, Nasivin and Seven Seas.

The offer price suggests that Merck climbed down from price demands of as much as 4 billion euros, which sources have told Reuters deterred initial suitors such as Nestle, Perrigo and Stada owners Bain and Cinven.

The agreement is expected to close by fourth quarter 2018, Merck said in a separate statement bit.ly/2Hbtuth.

As part of the transaction, Merck said, it is contemplated that about 3,300 employees, mainly from the consumer health unit, will transition to P&G upon completion of the transaction, subject to prior works council consultation where required.

“The attractive price reflects the high asset value and the performance Consumer Health has delivered,” said Stefan Oschmann, chief executive of Merck.

For Merck’s Indian business, P&G will buy a majority stake in Merck Ltd and subsequently make a mandatory tender offer to minority shareholders.

Reporting by Shalini Nagarajan in Bengaluru and Ludwig Burger in Frankfurt; Editing by Sunil Nair and Gopakumar Warrier

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