Shares of drugmaker Schering AG soared 22 percent Monday after rival Merck KGaA made an unsolicited offer to buy the company for 14.6 billion euros ($17.4 billion).
Merck KGaA has made a formal, 77 euro-per-share hostile takeover bid for fellow German drugmaker Schering AG, but was swiftly rebuffed by Schering's management which said the offer significantly undervalues its business.The unsolicited offer was made by Merck over the weekend, according to Schering, which said it fails to recognise its prospects as an independent pharmaceutical company.
No negotiations are ongoing between the companies, Schering added."Irrespective of [Schering] management board's recommendation, the decision to accept our offer lies with the shareholders. We are confident that they will consider this offer, which represents full and immediate value, as attractive," said Merck's chairman Michael Roemer.
German Merck Chief Executive Michael Roemer said the 77 euro ($91.77) a share offer for German Schering would combine two solid companies and make them more competitive on a global scale.
“This is an ideal union for both companies,” he said Monday of the offer, adding that Schering would remain based in Berlin. “It would provide a quantum leap forward and give the company a global platform for lasting and profitable growth.”
Insiders' view: does this start a new round of Big Pharma consolidation? Possibly. But not for the obvious and often stated reasons of "synergies" and cost efficiencies.
Mergers dont make bad figures good....... but they can help hide bad figures.
Many Big Pharma companies are looking for ways of hiding future bad growth figures. A merger can buy a couple of years of "camouflage"!
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