Merck pulled out of the bidding for its German rival saying that an offer in excess of Bayer’s E16.3 billion, or E86 per share, would not be justified. The executive board of Schering will now recommend the Bayer offer to its shareholders.
Should the takeover go ahead, the combined company would have annual sales in the region of E9 billion. The new entity would be known as Bayer-Schering Pharmaceuticals and be headquartered in Berlin.
“We are convinced that merging the two companies will create a health care heavyweight of international standing with a strong market position based on an innovative product portfolio and a well-stocked pipeline,” said Werner Wenning, chairman of the Bayer management board.
It has also been suggested that the merger could prompt a wave of industry consolidation in the European pharmaceuticals sector. Speculation has already centered on AstraZeneca as a possible takeover candidate.