Bayer clinches Schering purchase
pharmafile | June 16, 2006 | News story | Sales and Marketing |Â Â Â
The tussle between Merck KGaA and Bayer for control of fellow German pharma company Schering has been settled, with Merck agreeing to sell Bayer its 22% stake in the company.
The agreement paves the way for Bayer to acquire the remaining shares in Schering and create a major new German pharma company.
Under a deal hammered out between Bayer chairman Werner Wenning and his opposite number at Merck Dr Michael Roemer, the companies agreed terms which included the possibility of working together more closely
Bayer's Wenning said: "All three companies concerned will benefit from this step. We are very optimistic that we can now secure at least the three-quarters of Schering's capital stock that we were aiming for, enabling us to quickly begin the integration process.
"We're very pleased about Merck's decision, because a lengthy competitive bidding process would have greatly affected Schering's future."
Bayer will pay 89 euros a share for Merck's stake in Schering, a price that values the company at about 17 billion euros (about 12 billion pounds).
Merck's second quarter figures benefit from profits on the sale of the shares of about 400 million euros (273 million pounds), though Dr Roemer denied short-term profit was a motivation for a company that "thinks in generations".
"But, when an option to secure one's position arises, a company has the responsibility to make every possible effort, right up to the very end," Dr Roemer said.
In their discussions, Merck and Bayer agreed to consider the possibility of expanding any areas in which they currently cooperate and to also develop further ones.
Merck initially made a hostile takeover bid for Schering in March, but then bowed out of proceedings after Bayer made a superior offer for the company.
Merck unexpectedly re-entered the fray in June, prompting Bayer to file a US lawsuit against it – now dropped – for attempting to spoil its takeover bid.
Bayer is Germany's biggest pharma company and in 2005 notched up a sales growth of 27%, due mostly to the acquisition of Roche's OTC business.
Its aim is to continue this rapid growth through the acquisition of Schering to form a leading pharma company focusing on several specialised therapy areas.
The new company will be called Bayer Schering Pharma and have its headquarters in Berlin.
