By Lisa Kerner
Charlotte, N.C., March 9 - Merck & Co., Inc. announced on Monday that it will acquire Schering-Plough Corp. in a stock-and-cash transaction valued at $41.1 billion, or approximately $23.61 per share.
Schering-Plough shareholders will receive 0.5767 shares of Merck and $10.50 in cash for each share of Schering-Plough. Each Merck share will automatically become a share of the combined company, a joint news release from the companies said.
The offer price is a premium of approximately 34% to Schering-Plough shareholders based on the closing price of the company's stock on March 6.
Merck said the transaction will be structured as a reverse merger, with Schering-Plough remaining as the surviving public corporation and renamed Merck.
Total consideration will be comprised of approximately 44% cash and 56% stock.
The cash portion will be financed through a combination of $9.8 billion from existing cash balances and $8.5 billion from committed financing to be provided by J.P. Morgan, according to Merck.
The boards of directors of both pharmaceutical companies have approved the transaction, which is expected to close in the fourth quarter of 2009, subject to shareholder approval.
Upon closing, Merck shareholders will own approximately 68% of the combined company and Schering-Plough shareholders the remaining 32%.
Richard T. Clark, Merck chairman, president and chief executive officer, will lead the combined company out of Merck's Whitehouse Station, N.J., headquarters location. Schering-Plough is based in Kenilworth, N.J.
Three representatives from Schering-Plough's board of directors will join the board of the combined company, said Merck.
According to Merck, a "substantial majority" of Schering-Plough employees are expected to remain with the combined company.
"The combined company will benefit from a formidable research and development pipeline, a significantly broader portfolio of medicines and an expanded presence in key international markets, particularly in high-growth emerging markets," Clark said in the release.
J.P. Morgan advised Merck, and Schering-Plough was advised by Goldman, Sachs & Co. and Morgan Stanley.
| Acquirer: | Merck & Co., Inc.
|
| Target: | Schering-Plough Corp.
|
| Announcement date: | March 9
|
| Price per share: | 0.5767 Merck shares and $10.50 in cash
|
| Transaction total: | $41.1 billion
|
| Expected closing: | Fourth quarter of 2009
|
| Stock price of target: | NYSE: SGP: $17.63 on March 6
|
| Stock price of acquirer: | NYSE: MRK: $22.74 on March 6
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
