13 March 2006 18:05 [Source: ICIS news]
LONDON (ICIS news)--German pharmaceuticals and specialty chemicals company Merck KGaA said on Monday that its hostile Euro14.6bn ($16.2bn) takeover bid for rival Schering was driven purely on the advantages of creating a larger pharmaceuticals group.
Merck said there may be some synergies to be gained for its specialty chemicals business but this played no part in the takeover strategy.
The bid for Schering, which was unveiled earlier on Monday, had been driven solely on pharmaceutical considerations, said a Merck spokeswoman.
She said, however, that the life sciences and analytics division of the chemicals business could benefit from being part of a larger pharmaceuticals group with combined sales of Euro11.2bn.
Schering, the world's largest birth-control pill maker, has no specialty chemicals business and could provide Merck's life sciences and analytics activities with additional business. "But it's too early to say for sure," the Merck spokeswoman said. "We don't know how much capacity is taken up or what's in the pipeline."
She said that Merck remained fully committed to its specialty chemicals business, which last year accounted for about one-third of the company's overall sales of Euro5.9bn. "We certainly don't have any plans to sell our chemicals business," said the spokeswoman.
Merck's chemicals business has two other divisions, pigments and liquid crystals. The liquid crystals unit is the most profitable; it boosted fourth quarter operating profits last year by 53% to Euro107m on sales also up 53%, to Euro739m.
Merck's hostile Euro77 per share offer for Schering, which would make the combined group the second largest German pharmaceuticals company behind Bayer, has been rejected by the Schering board. Shares in Schering rose sharply after the bid was announced and closed up 26% at Euro84.59.
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