Merck and Schering-Plough Plow Through Antitrust Concerns As They Target Merger By End Of Year

Merck’s acquisition of Schering-Plough is plowing ahead as the companies addresses competitive concerns raised by antitrust enforcers.

 In an October 29, 2009, Consent Order, the FTC is permitting the acquisition – which would result in the one of the world’s largest prescription drug companies – to go forward provided the two companies divest of certain assets.  The European Union granted a smooth approval to the companies’ merger just a week earlier.

 The divestitures required by the FTC are already well underway.  As discussed in an earlier post, the anticipation and remedying of potential objections by regulators has allowed the Merck and Schering-Plough deal to progress.  In addition to the EU, Canadian and Swiss antitrust authorities have also given the green-light for this acquisition to continue.  The transaction still needs to obtain approval from other regulators, including Mexico and China before its anticipated close in the fourth quarter of 2009. 

 The main hurdle for FTC clearance was the concern regarding the parties’ animal health operations, but, as discussed earlier, Merck has already taken steps to divest itself of its shares in Merial, its animal health joint venture with Sanofi-Aventis.  This approval signifies that Merck and Schering-Plough have satisfied the issues raised in the FTC’s June 22, 2009, second request.

 The successful merger of the two companies would result in the world’s second largest prescription drug companies – behind only Pfizer, Inc.