Drugmaker Merck & Co., Whitehouse Station, N.J., has agreed to pay $41 billion in cash and stock to acquire Schering-Plough, a Kenilworth, N.J., pharmaceutical company that has been a longtime partner with Merck on the cholesterol drugs Zetia and Vytorin. The deal calls for Merck to pay $10.50 cash plus roughly a half-share of Merck stock for each share of Schering-Plough stock, according to a news release. The purchasing price represents a 44% premium over Schering-Ploughs 30-day average closing stock price.
Under the agreement, Richard Clark, chairman, president and chief executive officer of Merck, will lead the company, which will combine under the Merck name. Schering-Plough Chairman and CEO Fred Hassan is expected to stay on at least through the completion of the integration process. The acquisition is expected to double the number of drugs Merck has in Phase III development, bringing the total to 18. It will also expand its portfolio in a number of treatment areas, including cardiovascular, respiratory and cancer drugs.
Both Schering-Ploughs and Mercks boards have approved the deal, but it is still subject to shareholder and regulatory approval. The deal is expected to close during the fourth quarter of 2009. The two drugmakers reported combined revenue of $47 billion in 2008.