Bayer or Merck, Who will acquire Schering

Bayer or Merck, Who will acquire Schering

Bayer or Merck, Who will acquire Schering

Bayer AG said Tuesday that it is considering buying further Schering AG shares on the market, at a per-share price above the $108 (€86) that Bayer offered in its takeover bid.

"Bayer is sticking to its goal of getting a two-thirds majority of Schering," the company said. To that end, Bayer said it had bought a further 530,417 shares on the market by Monday afternoon for $108 each. With that, Bayer holds 23.36% of Schering. A further 36.78% has been tendered to Bayer as part of its takeover offer, which Schering supports.

Bayer came into trouble with its Schering offer as rival Merck KGaA began building up its own Schering stake, which was under 5%, by purchasing shares starting last week. Bayer now controls 60.15% of the Schering capital. Merck holds 20.71%. Bayer had set itself a target of buying 75% of Schering's shares in order to integrate the company by late this year.

In March, Merck published a hostile offer of €77 a Schering share, but was outbid ten days later by Bayer's offer of $108 a Schering share, backed by the Schering management.

Analysts are still puzzled by Merck's aggressive purchase of Schering's shares. Some said the family-dominated company may want to force Bayer to pay it a higher price, or gain a better bargaining position should it want to obtain the rights to Schering products or assets that would have to be sold off to placate antitrust regulators.

Schering said Monday that it believes Bayer's offer is the "most attractive solution for Schering and its employees."

Merck KGaA is independent of Merck & Co. of the U.S. The U.S. company started out as a subsidiary of Germany's Merck but was confiscated by the U.S. government after World War I and made independent. Similarly, Schering's U.S. assets also were confiscated during the two world wars, which eventually led to the creation of Schering-Plough Corp. of the U.S.