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EU nod for drug firms' tie-up
By Raf Casert |
October 24, 2009, Saturday
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THE European Union yesterday approved the proposed tie-up of United States drug makers Merck & Co and Schering-Plough Corp which would create the second-biggest global producer of prescription medicines.
The EU's antitrust authorities said in a statement yesterday that the "transaction would not significantly impede effective competition" in Europe.
The US$41.1-billion acquisition of smaller Schering-Plough will allow Merck to leapfrog to No. 2 worldwide in prescription medicine, just behind Pfizer Inc, which last week bought Wyeth for US$68 billion. The new Merck-Schering company would have about US$42.4 billion in annual sales.
The two companies hope to fully close the deal in the fourth quarter after shareholders approved it on August 7. The deal still needs approval from the US Federal Trade Commission.
The EU said the overlap would not pose significant problems in Europe even though both companies have operations in prescription pharmaceuticals.
Merck is a research-driven firm that also makes vaccines, while Schering is a health care group centering on prescription drugs as well as over-the-counter and animal health products.
In its checks for overlaps in Europe, specifically in the areas of asthma and allergic rhinitis, the EU Commission found the products were not close competitors and that the tie-up would not prevent enough other companies from competing.
In the animal health market, concerns were assuaged when Merck sold its 50-percent share in the joint venture Merial to rival Sanofi-Aventis.
Merck and Schering-Plough have been partners for several years on the cholesterol drugs Vytorin and Zetia, but their once-surging sales have been declining steadily since January 2008.
That partnership between the New Jersey neighbors helped set up the deal.
Merck really needed Schering-Plough's much stronger stable of experimental drugs in development.
The EU's antitrust authorities said in a statement yesterday that the "transaction would not significantly impede effective competition" in Europe.
The US$41.1-billion acquisition of smaller Schering-Plough will allow Merck to leapfrog to No. 2 worldwide in prescription medicine, just behind Pfizer Inc, which last week bought Wyeth for US$68 billion. The new Merck-Schering company would have about US$42.4 billion in annual sales.
The two companies hope to fully close the deal in the fourth quarter after shareholders approved it on August 7. The deal still needs approval from the US Federal Trade Commission.
The EU said the overlap would not pose significant problems in Europe even though both companies have operations in prescription pharmaceuticals.
Merck is a research-driven firm that also makes vaccines, while Schering is a health care group centering on prescription drugs as well as over-the-counter and animal health products.
In its checks for overlaps in Europe, specifically in the areas of asthma and allergic rhinitis, the EU Commission found the products were not close competitors and that the tie-up would not prevent enough other companies from competing.
In the animal health market, concerns were assuaged when Merck sold its 50-percent share in the joint venture Merial to rival Sanofi-Aventis.
Merck and Schering-Plough have been partners for several years on the cholesterol drugs Vytorin and Zetia, but their once-surging sales have been declining steadily since January 2008.
That partnership between the New Jersey neighbors helped set up the deal.
Merck really needed Schering-Plough's much stronger stable of experimental drugs in development.
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