CINCINNATI — Procter & Gamble Co. (P&G) has agreed to acquire the consumer health business from Germany’s Merck KGaA , in a $4.2 billion deal that adds vitamins and food supplements to its lineup of over-the-counter medicines.

The deal said to be one of the biggest acquisitions in recent years for the P&G, which has been struggling with slow growth in key markets and falling revenue in its big Gillette razor business. P&G is expected to report its latest quarterly results on Thursday morning, moving up a day.

The Merck KGaA business manufactures over-the-counter products and generates around $1 billion in annual sales from a portfolio of 10 core brands that are sold in more than 40 markets but not the U.S. Its products include vitamins, Femibion supplements for women, Seven Seas cod liver oil and Nasivin nasal decongestant.

The German company put the unit on the block last year to focus its health care activities on prescription drugs. It isn’t affiliated with Merck & Co., the U.S. drug maker.

P&G said that the Merck KGaA acquisition would replace a joint venture with Teva Pharmaceuticals Industries Ltd. that sold OTC medicines, vitamins and supplements outside North America. The joint venture, which was formed in 2011 and 51% owned by P&G, will be terminated on July 1, P&G said.

P&G also recently held discussions with Pfizer Inc. to acquire its consumer health-care business, but the talks ended without a deal, according to people familiar with the discussions. The Pfizer unit, with brands including Advil pain medicine, Centrum vitamins and ChapStick lip balm, is more than three times the size of Merck KGaA’s.

Analysts said that Pfizer sale could top $10 billion, but potential buyers including GlaxoSmithKline PLC and now P&G have chosen to deal with other companies.

Last month Glaxo agreed to buy Novartis AG’s 36.5% stake in their consumer-health joint venture for $13 billion.

P&G’s health-care unit includes Crest and Oral B toothpaste as well as Vicks cold medicine, Prilosec heartburn relief and Pepto Bismol. It generated $7.5 billion in sales for the fiscal year ended June 30, roughly 12% of P&G’s overall revenue.

Consumer health is a highly fragmented, $233 billion market globally and has been consolidating in recent years. It has emerged as a tough business for drug makers like Merck KGaA. Sales don’t grow as quickly as prescription medicines, while updating brands and marketing them is expensive because of evolving demands from consumers and consolidation among consumer-health players and retailers.

Merck KGaA decided to sell the business because its prescription-drugs and performance materials units have been developing products such as a cancer immunotherapy and a multiple-sclerosis drug that the company considers promising and it wants to focus resources on realizing their potential.

For P&G, the deal comes four months after the company conceded a board seat to activist investor Nelson Peltz, ending the most expensive proxy battle ever fought. P&G said it officially won the vote by a razor-thin margin, but agreed to add Mr. Peltz.

That Mr. Peltz came so close to defeating P&G was a rebuke of the company’s strategy to jump-start sales. P&G has relied on huge brands like Tide and Gillette while rivals scooped up startups and smaller brands. Mr. Peltz, who argued that P&G should shift to smaller, niche brands and pull in more talent from the outside, assumed his board seat March 1.