Merck, Schering-Plough set to complete merger

NEW YORK (Reuters) - Merck & Co (MRK.N: Quote, Profile, Research) and Schering-Plough Corp SGP.N said their $41.1 billion merger will be completed later on Tuesday, marking the close of the second huge deal in the pharmaceutical industry in recent weeks.

Pfizer Inc (PFE.N: Quote, Profile, Research), the world largest drugmaker, closed its roughly $67 billion acquisition of Wyeth last month.

Merck said it and Schering-Plough would begin combined operations on Wednesday under the Merck name after the deal gained clearance from regulatory authorities in China and Mexico.

Under the terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares of the newly combined company and $10.50 in cash for each share of Schering-Plough. Each Merck common share will automatically become a common share of the newly combined company.

Merck said it has appointed Wells Fargo Shareowner Services as agent to exchange the Schering-Plough common stock.

To pave the way for its purchase of Schering-Plough, Merck in July agreed to sell its half-stake in the Merial pet care business for $4 billion to partner Sanofi-Aventis SA(SASY.PA: Quote, Profile, Research).

Merck is expected to reap huge cost savings from the Schering-Plough merger by cutting 15 percent of the companies' combined workforce.

It will acquire a number of valuable Schering-Plough drugs. But its overseas rights to blockbuster rheumatoid arthritis drug Remicade and to a newer once-monthly arthritis drug called Simponi remain in dispute.

Schering-Plough years ago acquired the rights to Remicade and Simponi from Johnson & Johnson (JNJ.N: Quote, Profile, Research), which sells Remicade in the United States. Simponi last month won approval in Europe.