Drugmaker Merck buying Schering-Plough for $41.1B in cash and stock

March 9, 2009

(ChattahBox) — More consolidation in the pharmaceutical industry as Merck & Co. is set to buy Schering-Plough Corp. for $41.1 billion in a deal. This latest business marriage comes only six weeks after the world’s biggest drugmaker, Pfizer Inc., announced it has agreed to pay $68 billion for Wyeth.

The cash-and-stock deal announced Monday comes as both companies are eliminating jobs and restructuring operations to further cuts costs. Each company currently has about 55,000 employees. The two New Jersey pharmaceutical companies are already partners in a pair of popular cholesterol fighters, Vytorin and Zetia,  and will now be a dominant player in treatment areas including cholesterol, respiratory, infectious disease and women’s drugs, as well as vaccines.

Big companies across the pharmaceutical industry are facing slumping sales as the blockbuster drugs of the 1990s lose patent protection, increased pressure to hold down prices and a dearth of major new drugs coming on the market. The two companies had a combined $47 billion in revenues in 2008.

The transaction is to be structured as a reverse merger. Schering-Plough’s shareholders will get $10.50 in cash and 0.5767 Merck shares for each Schering-Plough share they own. That’s a 34 percent premium to Schering-Plough’s closing stock price on Friday.

Merck’s top executive, Chairman and CEO Richard Clark, will lead the combined company, while Schering-Plough’s CEO, Fred Hassan, will participate in planning integration of the two companies until the close of the deal, which is expected in the fourth quarter.


Comments

One Response to “Drugmaker Merck buying Schering-Plough for $41.1B in cash and stock”

  1. Willy on March 9th, 2009 10:26 pm

    It’s a Huge merger I think
    Congratulation!!!

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