View Cart (0 items)
Pharmaceutical

Merck buying Schering-Plough in a $41.1 billion deal

March 09, 2009
/ Print / Reprints /
| Share More
/ Text Size+
Merck & Co. is buying Schering-Plough Corp. for $41.1 billion in stock and cash in a deal that gives the companies more firepower to compete in a drug industry facing slumping sales, tough generic competition and intense pricing pressures, reported by the Associated Press. The announcement will unite the maker of asthma drug Singulair with the maker of allergy medicine Nasonex and form the world''s second-largest prescription drugmaker. Merck and Schering are already partners in a pair of popular cholesterol fighters, Vytorin and Zetia. Big companies across the pharmaceutical industry are facing slumping sales as the blockbuster drugs of the 1990s lose patent protection, complicated by a dearth of major new drugs coming on the market. Merck and Schering-Plough, along with most of their rivals, are currently eliminating thousands of jobs and restructuring operations to further cuts costs. The two companies had a combined $47 billion in revenue in 2008. Merck has about 55,200 employees and Schering-Plough, which grew significantly with its November 2007 acquisition of Dutch biopharmaceutical company Organon BioSciences NV, has about 50,800 employees. The two New Jersey pharmaceutical companies said that Merck’s Chairman and CEO Richard Clark will lead the combined company, which will be a dominant player in treatment areas including cholesterol, respiratory, infectious disease and women''s drugs, as well as vaccines. The transaction is to be structured as a reverse merger. As a result, Schering-Plough will be the surviving corporation but will be take the name Merck. The new company will be based at Merck''s sprawling headquarters in Whitehouse Station, N.J., but said that the majority of employees of Kenilworth, N.J.-based Schering-Plough will remain with the combined company. Merck executives believe that with Schering-Plough as the surviving company, under its partnership with New Jersey neighbor Johnson &Johnson, the change-in-control provisions should not be triggered. The companies said this will improve their finances, giving them annual cost savings of about $3.5 billion each year after 2011, and will boost earnings per share in the first full year after the deal closes.
You must login or register in order to post a comment.

Related Events