Bayer white-knight bid for Schering poised to create German drug giant

The board of Schering AG announced yesterday that it will support a voluntary public offer by Bayer AG to acquire all the outstanding shares of Schering AG for $19.7 billion in cash. “The Executive Board has carefully examined the proposal considering the interests of all stakeholders. The price … per share in connection with several other important commitments is a good offer. Joining forces of Schering and Bayer will form a leading specialized pharmaceutical company,” said Hubertus Erlen, chairman of the executive board of Schering AG, in a statement. “Both businesses are complementary and follow the same strategy. Together they will be even more competitive internationally.” Schering and Bayer have agreed to combine both businesses to create a global pharmaceutical company with approximately $9 billion in sales annually and its headquarters located in Berlin. The name of the new company would be Bayer Schering Pharma. Bayer said it plans to cut 6,000 jobs, or 10% of the work force of the combined operations. “Bayer Healthcare and Schering have a combined work force of around 60,000 people,” Bayer chief executive Werner Wenning said during a telephone press conference Friday.

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