Schering-Plough buys Organon for $14.4 billion

Schering-Plough said that the acquisition would fill a gap in the company's late-stage pipeline by adding five compounds in phase III development and a number of promising projects in phase II development.

“In addition, the acquisition of Organon BioSciences enhances Schering-Plough's strength in human and animal biologic products, including the potential to develop human vaccines. In light of Schering-Plough's expanding early pipeline, Organon BioSciences's strong biologics manufacturing capability is a further important asset for the combined company,” said Fred Hassan, chairman and CEO for Schering-Plough.

The transaction, which is expected to close by the end of 2007, is anticipated to be accretive to Schering-Plough's earnings per share by about 10 cents in the first full year, excluding purchase-accounting adjustments and acquisition-related costs.

Organon, had sales of $3.4 billion in 2006, including leading products such as Follistim/Puregon, a follicle-stimulating hormone for infertility; Esmeron/Zemuron, a muscle relaxant; and NuvaRing and Implanon for contraception. In addition, the animal health business, Intervet, with sales of approximately $1.5 billion in 2006, is one of the top three animal health care companies globally, with products treating a broad array of animals and disease states.

Netherlands-based Akzo originally planned to float the business and list 20-30% of Organon in an initial public offering. However, Schering-Plough's offer is higher than analysts had expected Akzo to achieve in an initial public offering for the unit.