NewsFlashBayer seals Schering deal as Merck backs off

14 June 2006 14:29  [Source: ICIS news]

LONDON (ICIS news)--Bayer has on Wednesday succeeded in its protracted battle to take over fellow German pharmaceuticals major Schering after rivals Merck KGaA agreed to sell its 21.8% stake in the company to create the country's biggest drug maker.

The acquisition, the biggest in Bayer's history, comes at an inflated price of €89 per share putting the value of the deal at about €17.1bn ($22bn), up from the €16.5bn original offer.

"We’re very pleased about Merck’s decision, because a lengthy competitive bidding process would have greatly affected Schering’s future," said Bayer management board chairman Werner Wenning. "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."

Bayer will now pay all other Schering stockholders who have accepted the original offer or who decide to do so before the acceptance period, which expires at midnight today, an extra €3. 

On the back of Merck's decision, Bayer said that it would also withdraw the suit filed in New York on Tuesday and that the two German rivals had agreed to look into further possible opportunities for cooperation.

Bayer began purchasing Schering shares on the Frankfurt stock exchange on Friday (9 June) and said on Tuesday that it would buy shares from the open market at above its €86 offer price in an effort to push through its takeover bid and end Merck’s attempts to hijack the deal.

Merck did not say when it had started the share buying but with an offer from Bayer of €89 per share, it would receive around €1.5-3 per share premium over the price it had paid on the open market. Merck has from the close of Thursday until the close of Tuesday upped its stake in Schering to 21.8% from just over 10%, according to SEC estimates.

By: Hilde Ovrebekk
+44 20 8652 3214

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