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News : International Last Updated: Apr 24, 2009 - 5:31:05 PM


US drug giants Merck and Schering-Plough to merge; 15% of joint payroll to be cut - - mainly outside the US
By Finfacts Team
Mar 9, 2009 - 2:06:42 PM

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US drug giants Merck and Schering-Plough, today announced plans to merge in a $41.1 billion cash-and-stock deal that follows just weeks after Big Pharma's biggest firm Pfizer announced plans to team up with Wyeth. About 15% of the joint payroll will be cut with a high percentage of the job eliminations happening outside the US.

US drug giants Merck and Schering-Plough, today announced plans to merge in a $41.1 billion cash-and-stock deal that follows just weeks after Big Pharma's biggest firm Pfizer announced plans to team up with Wyeth. About 15% of the joint payroll will be cut with a high percentage of the job eliminations happening outside the US.

The giant drug firms are facing increasing challenges in building their pipelines, while patent expiration on cash-cow blockbusters are looming.  

"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," Merck Chairman and Chief Executive Richard T. Clark said in a joint press release.

Last month, Clark said Merck was open to buying a big rival, signaling a strategy change as it had previously maintained, that its research to power growth. Merck and Schering-Plough are in an existing partnership. through their cholesterol-drug joint venture.

Clark will head the combined company, which will retain the Merck name.

Clark said the integration is expected to result in a work-force reduction of about 15%, with a high percentage of the job eliminations happening outside the U.S.

Merck has about 55,200 employees world-wide, with 28,000 in the US. while Schering-Plough has about 51,000 global employees, with just 15,000 in the U.S.

Under the deal, Schering-Plough shareholders would get 0.5767 share of Merck and $10.50 in cash for each share they own. That values Schering-Plough at $23.61 a share, a 34% premium to Friday's closing price. Merck shareholders would own 68% of the combined company.

Last year's combined revenue of the two companies was $47 billion. Schering-Plough generates about 70% of its revenue outside the US, including more than $2 billion a year from emerging markets.

Both companies employ around 2,000 people between them with Merck's main plant in Ballydine, Co. Tipperary.

In November, 2007, Merck announced plans to establish a new €200 million ($280 million) strategic vaccine facility at Carlow Town,

Schering Plough's main Irish plant is in Brinny, Upton, near Bandon, Co. Cork

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