Merck KGaA may cut up to 4,500 jobs if its $17.4 billion hostile bid for fellow German drugmaker Schering AG succeeds, according to the Financial Times, which cites persons close to the situation. A spokesperson for Merck declined to comment on the rumour.
But 3,000-4,500 job losses - mostly outside of the firm’s domestic market - are lower than many had feared, leading to speculation that the information was leaked in an attempt to dampen any potential political protest over the deal, the FT writes.
Earlier this week, Merck announced its 77 euro-per-share hostile takeover bid for Schering, in a move designed to create a specialised pharmaceutical and chemicals company with the scale and muscle to compete on the global stage. The combined entity would have pro forma sales of 11.2 billion euros, with pharma sales of 5.6 billion euros and an R&D budget of 1.3 billion euros, primarily in specialist areas such as oncology and hormonal therapies. Cost-savings could be in the region of 500 million euros a year through to 2009.
But yesterday Schering turned its back on the deal as expected, on the grounds that the offer “does not reflect our company's value.” Some analysts believe that other companies may now come forward and try to top Merck's bid.