Schering board supports Bayer's offer
The executive board of Schering AG in Germany, says it supports the voluntary public offer by Bayer to acquire all outstanding shares of Schering for Euro 86 in cash and will recommend that shareholders accept the deal.
The executive board of Schering AG in Germany, says it supports the voluntary public offer by Bayer to acquire all outstanding shares of Schering for Euro 86 in cash and will recommend that shareholders accept the deal.
This offer represents a 39% premium over the Schering share price prior to the announcement of the hostile bid by Merck and is more than 12% above the competing offer. At the offer price, Schering's equity is valued at €16.3bn, based on 190m shares outstanding.
"The price of €86 per share in connection with several other important commitments is a good offer. Joining forces of Schering and Bayer will form a leading specialised pharmaceutical company," said Dr Hubertus Erlen, chairman of Schering's executive board.
Schering and Bayer have agreed to combine both businesses under the new name Bayer Schering Pharma. The headquarters and its executive board would be in Berlin. Research centres would be in Berlin and Wuppertal and in the US, Richmond, Berkeley and West Haven.
Schering AG is focused on four research areas: Gynecology & Andrology, Oncology, Diagnostic Imaging as well as Specialised Therapeutics for disabling diseases. The deal would move Bayer's healthcare ranking into the top 12 in the world.
Bayer says it also anticipates synergies producing savings to the tune of €700m annually from the third year after completion. The proposed new enterprise would have four projects in registration, 19 in Phase III clinical testing, 14 in Phase II trials and 17 in Phase I development.
To help finace the deal Bayer says it plans to sell its subsidiaries H.C. Starck and Wolff Walsrode, which are currently assigned to the Bayer MaterialScience subgroup.
Merck KGaA, of Darmstadt, Germany, announced its intention to mount a €14.6bn takeover over a week ago. However, the executive board of Schering said that Merck's approach was unsolicited and that its offer significantly undervalued Schering and its prospects as an independent specialised pharmaceutical company.