Monday, December 18, 2006
The Associated Press December 18, 2006, 5:58AM EST
EU regulators on Monday cleared Germany's Merck KGaA to buy Swiss biotechnology company Serono SA.
The European Commission cleared the deal automatically after identifying no antitrust problems and receiving no complaints from rivals within a deadline of 25 working days.
After losing a bid to acquire Schering AG earlier this year, Merck announced in September that it had bought a majority stake in Serono as part of a 16.6 billion Swiss franc (euro10.5 billion; US$13.31 billion) takeover, expanding its range of drugs and increasing its share of the global biotechnology market.
Merck bought the 64.5 percent stake held by the Bertarelli family and will make a public tender offer for the rest of the shares after its deal with the family has closed in January, Chief Financial Officer Michael Becker told reporters in October.
He also said that, as of Sept. 30, Merck had acquired Serono shares on the market, paying euro455 million (US$571.3 million), and planned to buy more.
The deal will give the Darmstadt-based pharmaceutical maker, whose products include the cardiovascular treatment Concor and cancer drug Erbitux, access to new markets thanks to Serono's partnership with Pfizer Inc. to market the multiple sclerosis drug Rebif.
Analysts said the deal is part of Merck's strategy to stay competitive. Many mid-sized drug companies have looked at combining their operations and research with others in an attempt to keep pace.
Merck's Pharma Ethicals division will be combined with Serono to create Merck-Serono Biopharmaceuticals. The headquarters of that business will be in Geneva, while its U.S. base of operations will be in Boston.
The new group is forecast to have pro forma sales of euro7.7 billion (US$10.1 billion), of which euro3.6 billion (US$4.7 billion) will be biopharmaceutical sales.
Merck, founded as a pharmacy in 1668, is the oldest pharmaceutical business in the world. It has been entirely separate from New Jersey-based Merck & Co. since the end of World War I and employs some 29,000 people.
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