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Merck
buying Schering-Plough for $41.1b in cash and stock
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.
The deal announced Monday would 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.
The latest combination comes only a few weeks after
Pfizer Inc. announced it has agreed to pay $68 billion
for Wyeth.
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.
Merck Chairman and CEO Richard Clark told The Associated
Press “this is a uniquely complementary match.”
He said the combined company will be “well-positioned
for sustainable growth through scientific innovation”
and have a strong, diversified product portfolio. “We’ll
double Merck medicines in (late-stage development) to
18,” he added, and get Schering-Plough products
that, unlike many of Merck’s and their competitors’
products, won’t face generic competition for several
years.
Schering-Plough CEO Fred Hassan said in an interview
that those drugs include Nasonex, Pegintron for hepatitis,
cancer drug Temodar, the Nuvaring contraceptive and
the two cholesterol drugs, all of which have patent
protection until 2014 or later.
The two companies had a combined $47 billion in revenue
in 2008, nearly as much at the largest drugmaker, Pfizer
Inc., which posted $48.42 billion. Pfizer is in the
midst of acquiring Wyeth, which would add more than
$20 billion to its annual revenue.
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.(AP)
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