Bayer has won its battle to acquire fellow German company Schering AG, after rival Merck KGaA, faced with legal action in the USA, agreed to sell its near-22% stake in the firm.

With the deadline for the Bayer/Schering transaction just hours away, Merck tendered its stake for a healthy profit, as well as assurances that it will cooperate with the new entity in the future.

Merck launched a hostile takeover bid for Schering in March, offering 77 euros per share, but was rebuffed by Schering’s management, prompting Bayer to come forward with its own 86-euro bid. Schering accepted the terms, and Merck officially bowed out of the race.

But as today’s deadline for the transaction neared, Merck started to build a stake in Schering that made it hard for Bayer to secure the 75% of shares required to complete the deal. Late yesterday, Bayer filed suit in the USA in an attempt to force Merck to come clean on its intentions, and shortly after Merck agreed to sell its stake for a price of 89 euros per share, equivalent to a profit of around 400 million euros.

Bayer is now obliged to offer all other Schering shareholders the same amount to tender their shares, pushing the value of the transaction up to 17 billion euros, around 500 million euros more than originally planned.

Merck insists that it was not out to make a quick buck at Bayer’s expense, saying its goal was "intended to secure its long-term strategic interest in Schering." Merck and Bayer have agreed in discussions to consider the possibility of "expanding current cooperations and developing further ones," it said in a statement.

“We are convinced that we have reached an agreement that is advantageous for all the companies involved and that it will strengthen their potential for the future,” said Michael Roemer, Merck’s chairman.

Bayer chief executive Werner Wenning echoed this sentiment, implying that the chain of events had culminated in a win-win-win deal for all the parties involved. “All three companies concerned will benefit from this step,” he said.

Speculation among industry observers is that Merck will seek to tap into Bayer’s distribution channels for medicines in the USA and other regions such as Japan.