February 24, 2012 / 4:16 PM / 8 years ago

UPDATE 2-Merck KGaA to cut costs, jobs

* Merck cites market shifts, tough competition

* Says won’t disclose yet how much it aims to save

* Shares down 1.7 percent (Adds details, CEO comment, background)

FRANKFURT, Feb 24 (Reuters) - German drugs and chemicals group Merck KGaA announced plans on Friday for a cost-cutting programme across all its businesses that may include job cuts.

“Over the next two years Merck needs to address unprecedented market shifts, increasing competition in key product areas and existing inefficiencies in its own organization to ensure the long-term success of its business model,” Chief Executive Karl-Ludwig Kley said in a statement.

The maker of drugs and liquid crystals used in flat screen televisions did not say how much it aimed to save, how it planned to cut costs or which businesses would be affected.

“We have a view on what needs to be achieved, but we will consult with the employee representatives on a country-by-country basis and we will consider any pragmatic proposals,” Kley said.

Merck shares were off 1.7 percent at 79.28 euros by 1600 GMT, while Germany’s blue-chip index was up 0.6 percent.

The move comes after Merck pulled the plug on one of its biggest pipeline drugs last year, saying U.S. drug regulators’ concerns about the risks of its cladribine pill will put an end to any development or marketing plans for the multiple sclerosis (MS) treatment.

Merck has also brought in new management, hiring Lanxess’s finance chief Matthias Zachert to take over as chief financial officer and Stefan Oschmann, an executive from U.S. rival Merck & Co as the new head of its drugs division.

Merck is due to publish its full-year results on March 6.

After the first nine months of the year, Merck cut the top end of its 2011 sales forecast after sluggish demand for consumer electronics dimmed prospects for its liquid crystals business. (Reporting By Maria Sheahan; Editing by David Hulmes and Greg Mahlich)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below