We can observe a wave of mergers in the pharmaceutical industry. Lately, the biggest player on the market – Pfizer Inc.in a $68 billion acquisition took over the Wyeth.
Yesterday, we were informed by an another announcement that Merck (the second the biggest company in the pharmaceuticals) is buying Schering-Plough in a $41.1 billion deal.
The reasons that justify the Merck acquisition are:
1. Access to the new businesses,
2. Access to a promising pipeline of new products,
3. Chance to cut costs, including eliminating about 16,000 jobs.
After announcement Schering’s shares skyrocketed and Merck’s fell, so typical for a company doing a big acquisition and funding part of it with new shares.
Schering shares jumped $2.50, or 14.2 percent, to $20.13, and Merck shares fell $1.75, or 7.7 percent to $20.99.
Schering-Plough will be the surviving corporation (as the transaction was organised as a reverse merger) but will take the Merck name and will be based at Merck’s headquarters.
The transaction is subject to approval by Merck and Schering-Plough shareholders and customary closing conditions and regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as well as clearance by the European Commission under the EC Merger Regulation and certain other foreign jurisdictions.
More information:
http://news.aol.com/article/merck-buying-schering-plough-in-a-411b/374578
http://www.tradingmarkets.com/.site/news/TOP%20STORY/2212741/
O autorze
March 10, 2009
This subject is a very interesting one from business perspective – I’m planning to publish a little piece in Polish about this aspect tomorrow.