Merck, Schering-Plough set to complete merger
NEW YORK (Reuters) - Merck & Co (MRK.N) and Schering-Plough Corp SGP.N said their $41.1 billion merger will be completed later on Tuesday, marking the close of the second huge deal in the pharmaceutical industry in recent weeks.
Pfizer Inc (PFE.N), the world largest drugmaker, closed its roughly $67 billion acquisition of Wyeth last month.
Merck said it and Schering-Plough would begin combined operations on Wednesday under the Merck name after the deal gained clearance from regulatory authorities in China and Mexico.
Under the terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares of the newly combined company and $10.50 in cash for each share of Schering-Plough. Each Merck common share will automatically become a common share of the newly combined company.
Merck said it has appointed Wells Fargo Shareowner Services as agent to exchange the Schering-Plough common stock.
To pave the way for its purchase of Schering-Plough, Merck in July agreed to sell its half-stake in the Merial pet care business for $4 billion to partner Sanofi-Aventis SA(SASY.PA).
Merck is expected to reap huge cost savings from the Schering-Plough merger by cutting 15 percent of the companies' combined workforce.
It will acquire a number of valuable Schering-Plough drugs. But its overseas rights to blockbuster rheumatoid arthritis drug Remicade and to a newer once-monthly arthritis drug called Simponi remain in dispute.
Schering-Plough years ago acquired the rights to Remicade and Simponi from Johnson & Johnson (JNJ.N), which sells Remicade in the United States. Simponi last month won approval in Europe.
But Johnson & Johnson claims the Merck merger constitutes a change-of-control under its long-standing agreement with Schering-Plough, allowing J&J to take back overseas rights to Remicade and Simponi. An arbitrator is expected to settle the dispute.
Merck shares were down 41 cents at $30.85 in afternoon trading on the New York Stock Exchange. Schering-Plough shares were off 13 cents at $28.27 in what will be its final day of trading on the NYSE.