Merck said Monday that it would acquire Schering-Plough for $41.1 billion, uniting the makers of cholesterol drugs Zetia and Vytorin. The combined 2008 revenue of the two companies totaled $47 billion. The transaction will be structured as a “reverse merger” in which Schering-Plough, renamed Merck, will continue as the surviving public corporation. Merck and Schering-Plough expect to complete the transaction in the fourth quarter of 2009. Merck’s CEO, Richard Clark, will lead the combined company.
For years, the whisper on Wall Street was for Merck and Schering-Plough to join forces. The Vioxx litigation must have put this on the back burner followed by the fall-out with Vytorin. Schering-Plough and Merck are long term partners in a cholesterol joint venture involving Vytorin. Vytorin and Zetia sales plunged last year along with the share price of the two companies after a pair of clinical trials lead to questions about the effectiveness of the medicines. Answers regarding the medication will not be available until a major study in 2011 or 2012.
The deal between Merck and Schering-Plough comes just six weeks after Pfizer, Inc. agreed to pay $68 billion for fellow drug maker Wyeth. Analysts have forecasted increase consolidation in the pharmaceutical industry for some time as companies struggle with slumping sales, fierce competition, and generics.
Richard J. Arsenault, 2011
