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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Vial Thirty-Three: The Third Run | Main | Disapproval of Approvability »

June 11, 2006

What's German For "Food Fight"?

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Posted by Derek

As those who follow the drug industry know, Bayer has been making an offer to acquire Schering AG of Berlin. This was after Merck KGaA (Darmstadt) had made a bid, which Bayer topped. They're trying to get 75% of the shares pledged, but it's been a hard slog. Many large investors seem to be hanging back, hoping for a bigger payout later on (as has happened in some other European takeover deals), and Bayer ended up extending the deadline to tender shares.

But on Friday of last week, Merck suddenly upped periscope and fired bow tubes. They filed paperwork with the SEC that they'd exceeded the 10% regulatory threshold of ownership of. . .Schering AG. They'd been out quietly buying the shares on the open market, apparently, and their statement said something about "protecting their investment".

The best German word for the reaction to this news is bestuerzung, translated into English as "consternation" or "dismayed confusion". Bayer issued a statement calling Merck's actions "incomprehensible", and pointing out that Merck was paying a price per share that they'd already dismissed as too high. So it'll be interesting to hear everyone's reaction to the latest news: Merck now says that they have 18.6% of Schering, and Bayer says that they're up to 61.5%.

It's fair to say that things like this don't usually happen in the German industrial world, so no one really knows how to deal with this one. Bayer's latest deadline is Wednesday the 14th, and if those figures are accurate, only about 20% of Schering AG shares are unaccounted for. Might as well start the popcorn popper and open a cold drink, and sit back to watch the show.

Comments (4) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. Joerg on June 12, 2006 3:29 AM writes...

Essensschlacht!

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2. d on June 12, 2006 9:30 AM writes...

Maybe you should ask, "What's German for squeeze?" There is only a 20% float and Bayer needs almost all of it to reach the 75% stake. If Schering's open market price rises above EUR86 and Bayer must buy shares on the market over that price to stop Merck, Bayer will have to pay the higher price to all Schering shareholders.

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3. drcharles on June 12, 2006 9:29 PM writes...

very interesting indeed. i treat a businessman who just returned fom Japan. he was telling me about the very different business climate and set of manners, much less hostile and more respectful, akin to the welcoming bow. i don't know if that's true or not. capitalism can be voracious.

btw - i've moved blog addresses. sorry for the html pain. take care,

Permalink to Comment

4. IP Person on June 13, 2006 12:19 AM writes...

What a show.
This reminds me of world wide wrestling where the two wrestlers are in the ring, and suddenly, a third jumps over the ropes and takes the two by the hair and slams their foreheads together. So, where's Aventis in all this?
(Not that I watch www too often...)

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