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Merck & Co and Schering-Plough Corp said their $41.1 billion merger will be completed later on Tuesday, marking the close of the second huge deal in the pharmaceutical industry in recent weeks.
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Pfizer Inc, the world largest drugmaker, closed its roughly $67 billion acquisition of Wyeth last month.
Merck said it and Schering-Plough would begin combined operations on Wednesday under the Merck name after the deal gained clearance from regulatory authorities in China and Mexico.
Under the terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares of the newly combined company and $10.50 in cash for each share of Schering-Plough. Each Merck common share will automatically become a common share of the newly combined company.
Merck said it has appointed Wells Fargo Shareowner Services as agent to exchange the Schering-Plough common stock.
To pave the way for its purchase of Schering-Plough, Merck in July agreed to sell its half-stake in the Merial pet care business for $4 billion to partner Sanofi-Aventis SA.
Merck is expected to reap huge cost savings from the Schering-Plough merger by cutting 15 percent of the companies' combined workforce.
It will acquire a number of valuable Schering-Plough drugs. But its overseas rights to blockbuster rheumatoid arthritis drug Remicade and to a newer once-monthly arthritis drug called Simponi remain in dispute.
Schering-Plough years ago acquired the rights to Remicade and Simponi from Johnson & Johnson, which sells Remicade in the United States. Simponi last month won approval in Europe.
But Johnson & Johnson claims the Merck merger constitutes a change-of-control under its long-standing agreement with Schering-Plough, allowing J&J to take back overseas rights to Remicade and Simponi. An arbitrator is expected to settle the dispute.
Merck shares were down 41 cents at $30.85 in afternoon trading on the New York Stock Exchange. Schering-Plough shares were off 13 cents at $28.27 in what will be its final day of trading on the NYSE.
(Reporting by Bill Berkrot and Ransdell Pierson; Editing by Tim Dobbyn and Gerald E. McCormick)
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