Bayer motion to dismiss Merck complaint granted in fight over asset deal

In an opinion posted to the site of the Court of Chancery of the state of Delaware, the court stated: "This litigation arises from the disputed interpretation of a Stock and Asset Purchase Agreement, or ‘SAPA,’ between Plaintiff Merck & Co. (MRK) and Defendant Bayer AG (BAYRY)… In 2014, Merck and Bayer entered the SAPA pursuant to which Bayer purchased Merck’s Claritin, Coppertone, and Dr. Scholl’s product lines. Bayer paid Merck more than $14 billion in cash for these product lines. After the transaction closed, both Merck and Bayer were the subject of lawsuits alleging injuries arising from consumers’ use of talc-based products… As discussed in detail below, the SAPA clearly and unambiguously provides that Merck indefinitely retained substantive liability for the product liability claims related to products sold prior to the closing of the transaction. While Merck attempts to argue that its liability for the product liability claims ceased on October 1, 2021, this interpretation is contrary to the clear and unambiguous terms of the SAPA. Considering Bayer’s interpretation of the SAPA is the only reasonable one, this Memorandum Opinion grants Bayer’s motion to dismiss Merck’s complaint." Reference Link