Shareholders of Merck & Co and Schering-Plough Crop on Friday endorsed merger of the two drug makers in a milestone development on the way to the deal's expected closure later this year.
The proposal received a thumping 99-per cent support from the respective companies' shareholders for what will see a Merck takeover of Schering-Plough in a cash-and-stock deal worth $41 billion when it was mooted in March. Merck's special shareholder meeting was held in Bridgewater NJ while Schering conducted its meeting in Boston.
Merck, beset by patent expirations and research setbacks will benefit with the access it will gain to Schering's strong research pipeline. Schering shareholders have been offered a 34-per cent premium to the stock price shortly before the deal was announced.
In March, Merck proposed to acquire its smaller rival Schering-Plough for 41.1 billion in a cash and stock deal, (See: Merck to acquire Schering- Plough for $41 billion) which would make Merck the world's second-largest drug company, behind Pfizer.
Merck announced the merger with Schering-Plough just two months after Pfizer announced that it proposed to acquire Wyeth for $68 billion. (See: Pfizer-Wyeth create $68-billion blockbuster deal)
The deal, structured as a reverse merger, will see Schering emerge as the surviving corporations under Merck's name and top management board control. After closing, Merck shareholders are expected to own about 68 per cent of the combined company, while Schering-Plough shareholders are expected to own approximately 32 per cent. Merck anticipates that the transaction will ''modestly'' add to earnings in the first full year following completion and ''significantly'' thereafter.