NEW YORK, NOV. 30 -- Merck & Co., one of the world's largest drug makers, announced plans today to sell its South African unit to a domestic conglomerate because of the increasing difficulties of doing business in the racially troubled country.
Merck, which has operated in South Africa since 1917, became the latest U.S. company to announce the sale of its interests there.
The nation has become increasingly isolated economically because of the white-minority government's policy of racial separation known as apartheid.
The sale of Merck Shape and Dohme (Pty.) Ltd. to Barlow Rand Ltd. will not affect the availability of Merck's health product lines in that country, the parent company said. "We have taken this action after intensive study and reflection," said P. Roy Vagelos, chairman and chief executive of Merck. "We believe that Barlow Rand is in a better position than Merck, in light of evolving circumstances, to maintain the availability and quality of our expanding line of human and animal health products and assure growth."
Barlow Rand is a diversified company with interests in mining, industrial operations, food and pharmaceuticals. Its worldwide sales this year are estimated at $8.7 billion.
In Johannesburg, Merck's managing director, Don Allen, told reporters that the sale was a result of restrictions on investment in South Africa by U.S. legislation aimed at dismantling apartheid.
"The company is in an unprecedented growth phase worldwide, with numerous new products being launched," he said. "The South African operation would have access to all these products, but under the old ownership structure it would be constrained, as it wouldn't have the capital necessary to grow."
Based in Rahway, N.J., Merck is one of the largest drug and health-care manufacturers, ranked 91st in the Fortune 500 list of U.S. industrial corporations with worldwide sales of $4.13 billion last year.
The South African operation employs 283 people, including 76 blacks and eight Asians. It accounts for less than 1 percent of Merck's total business but is considered a significant drug manufacturer and marketer within South Africa.
Vagelos said that "Barlow Rand, a progressive company that has been a leader in programs of social responsibility in that country, specifically has committed itself to maintaining the well-being of all Merck employes."
Under the agreement with Barlow Rand the subsidiary will change its name and senior management Jan. 1, but will remain a Merck licensee.
The Washington-based Investor Responsibility Research Center, which has been monitoring the U.S. corporate departure from South Africa, said Merck is the 13th company so far this year to announce the sale of its operations there.
So far in 1987, 48 American companies have sold their interests in South Africa, the center said