More consolidation in pharmaceutical industry as Merck buys Schering-Plough

Merck has agreed to buy rival Schering-Plough in a $41.1 billion (£30 billion) deal, which is set to create the world’s number 2 pharmaceuticals giant with combined revenues of $47 billion.

The deal follows Pfizer’s $68 billion takeover of rival Wyeth, announced in January.

Shareholders in Schering-Plough will get $10.50 in cash, and just over half of one Merck share, for each Schering-Plough share they own.

Following the news, shares in Schering-Plough climbed 18.4% to $20.88 in early trading. However, shares in Merck lost 3% to $22.06.

Merck’s chief executive, Richard Clark, will head the new company to be called Merck, which will be a strong, global healthcare leader built for sustainable growth and success,” according to Clark.

Mr Clark added that “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.”

The deal between the two groups, both of which are based in New Jersey, has been welcomed by analysts as it comes amid falling sales in the industry as many drugs are losing their patent protection.

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