Pharma giant Merck buys, Schering-Plough for $41 bn
US pharmaceutical giants Merck and Schering-Plough announced their merger early Monday in a stock-and-cash transaction valued at $41.1 billion.business Updated: Mar 09, 2009 22:36 IST
US pharmaceutical giants Merck and Schering-Plough announced their merger early Monday in a stock-and-cash transaction valued at $41.1 billion.
The combined company will bear the name Merck after the transaction is completed.
The deal was unanimously approved by the boards of directors of both conglomerates, a joint statement said.
Under the terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares and $10.50 in cash for each share of Schering-Plough.
Each Merck share will automatically become a share of the combined company, which will be headed by Merck chairman Richard Clark.
When the transaction is complete, Merck shareholders are expected to own approximately 68 per cent of the combined company and Schering-Plough shareholders 32 per cent.
Last year's combined revenue of the two companies totalled $47 billion. The merged entity is expected to have a cash and investments balance of approximately $ 8 billion.
The merger will be financed with a combination of $9.8 billion from existing cash balances and a $8.5-billion loan by investment bank JP Morgan.
The transaction will double the number of potential medicines Merck has in the most advanced phase of development, bringing the total to 18.
Schering-Plough generates about 70 per cent of its revenue outside of the United States. The merger will dramatically accelerate Merck's own international growth efforts, including the company's goal of reaching top five market share in targeted emerging markets, company officials said.