Merck bids for Schering14th March 2006
German drug group Merck has launched an £11 billion bid for rival Schering. Together the two German firms would have annual sales of 11bn euros.
Analysts said a merger would benefit both businesses as neither are big enough on their own to challenge larger rivals.
However, Schering has rejected the bid, saying that it significantly undervalued the firm.
Shares in Schering surged almost 30% after the bid was launched, though the Merck share price fell by more than 4% as analysts questioned whether the bid was too high. There was concern about the growth prospects for Schering as it does not have a pipeline of new, blockbuster drugs coming to market.
One of the main drivers behind the move would be cost cutting, and Merck said it expects to save as much as 500m euros a year from 2009.
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Title: Merck bids for Schering
Author: Chris May
Article Id: 120
Date Added: 14th Mar 2006