German pharmaceutical and chemical company Merck KGaA said Thursday it will sell its Theramex unit to Teva Pharmaceutical Industries Ltd. (TEVA) for EUR275 million.

Theramex, a pharmaceutical company specializing in women's health, had around EUR100 million in sales in 2009. The company plans to enter the contraceptive market.

Under the deal, Merck will still receive some milestone payments and retain distribution rights for Theramex products in certain countries, such as Spain and Brazil.

The deal, subject to regulatory approval, is expected to close at year-end or in early 2011.

"As Theramex is entering the contraceptive market, we firmly believe that a combination with Teva will not only contribute to growing its position in the gynecological market but also to building a major player in the area of contraceptives," Elmar Schnee, executive board member at Merck KGaA said in a press release.

Merck KGaA has said it aims to focus on its core business, which doesn't include contraceptives.

In Teva's most recent foray into Germany earlier this year, it acquired Ratiopharm, making it the world's number one generic drug maker.

-By Frankfurt Bureau, Dow Jones Newswires; +49 69 29725 500; djnews.frankfurt@dowjones.com