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March 24, 2006
Can You Say "Uebernahmeangebot"?
Merck KGaA made a bid for Schering AG a little while back, which is one of those pharma news items I never got around to talking about here. I have to put those German initials in there, because (just to confuse people who don't follow the pharmaceutical industry) those two companies have no connection with the US Merck of Vioxx fame or with Schering-Plough. Well, no connection since the First World War, anyway, when the US seized their assets here and split them off into new companies. A lucrative sideline would consist of being paid a dollar every time someone mixes these up.
At any rate, Schering AG sneered at the offer, saying that Merck valued their company far too cheaply. My usual response to things like this is to wonder, then, how such a bargain could be just sitting there on the open market without anyone realizing it, but hey, I'm not an M&A guru. (And you can make an argument that the German stock market doesn't do as good a job at valuing companies as the US ones, because German firms have traditionally not raised as much money through sale of stock. German stocks are a different world - note that the "German NASDAQ", the Neue Markt was closed in 2002 after only five years of trading. Germany basically experienced the dot-com boom through an entire stock exchange of its own).
Well, things were quiet on the merger news for a little while, until Bayer popped up last night with a higher bid for Schering AG. They seem to have thought that As of this morning, the press is reporting that Merck has pulled out of any possible bidding war, which no doubt leaves them wondering just what to do now, and leaves Bayer and Schering's people all wondering what just happened. Are other small-to-medium European pharma outfits (Novo Nordisk, Akzo Nobel, Solvay, Altana and so on) ready for some action of their own?
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