Merck Takes Stake in Serono

Merck, the German drug maker that lost a bid to acquire rival Schering this year, said Thursday that it had purchased a majority stake in Swiss biotechnology company Serono.

The transaction is part of a takeover worth 16.6 billion Swiss francs ($13.3 billion) that will expand Merck’s range of drugs and increase its share of the global biotechnology market.

Merck of Germany is the oldest drug company in the world and has been separate from the U.S.-based Merck & Co. since the end of World War I.

Merck said it agreed to pay 1,100 Swiss francs ($879) a share for the 64.5% stake in Serono held by the Bertarelli family and would make a public tender for the rest, probably in November.

The deal will give the Darmstadt-based pharmaceutical maker, whose products include cardiovascular treatment Concor and cancer drug Erbitux, access to new markets thanks to Serono’s partnership with Pfizer Inc. to market multiple sclerosis drug Rebif.

Analysts said the deal was 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. Bayer acquired Schering this year in a deal worth nearly 16.9 billion euros ($21.5 billion) after a tug of war with Merck.

The Merck-Serono deal “makes sense, and it fits the strategy,” Serono Chief Executive and Chairman Ernesto Bertarelli said. “Both companies need to increase their size to be able to compete in the global pharmaceuticals market.”

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.