Bayer to Take Over Schering

Bayer finally won control of Schering on Wednesday for an increased price of almost $22 billion as Merck bowed out and sold its stake to the larger drugs and chemicals group.

Darmstadt, Germany-based Merck is independent of Merck & Co. in New Jersey. The German company, which had built up a holding of more than 21% in Schering after its own bid for the contraceptive-pill maker was topped by Bayer, said it would sell the Schering shares to Bayer.

The move ends uncertainty over the fate of Bayer’s proposed acquisition and provides a windfall for Schering and Merck shareholders. Bayer investors, meanwhile, cheered the fact the deal would go ahead, and its stock jumped more than 8%.

“It’s definitely good that a solution has been found. Now Schering can be integrated as planned,” said Juergen Boehlen of Merck Finck Investment, which holds Bayer shares.

Bayer said investors in Schering who had already tendered their shares under its original offer of 86 euros ($108.34) would also benefit from the higher price of 89 euros ($112.12).

At 89 euros a share, Schering is valued at about 17.1 billion euros ($21.51 billion), against the original offer of about 16.5 billion euros. Berlin-based Schering is not affiliated with Schering-Plough of New Jersey.

“Bayer can still make this deal work at 89 euros but they may need to take a few more extra costs out of the business,” said UBS healthcare analyst David Beadle in London.

The acquisition of Schering, the biggest deal in Bayer’s 142-year history, would create a healthcare group with sales of more than 15 billion euros a year.

The deal would give Bayer access to Schering’s best-selling multiple sclerosis treatments as well as Yasmin, a birth control product that has helped make Schering the world’s biggest producer of oral contraceptives.

Leverkusen, Germany-based Bayer, founded in 1863, is known for its aspirin and prescription drugs such as the antibiotic Cipro.

Schering, founded in 1851 as a pharmacy, has grown to a corporation that employs 24,500 people worldwide.

Merck, also founded as a pharmacy in 1668, is the world’s oldest pharmaceutical business.

Reuters and the Associated Press were used in compiling this report.