Schwarz takeover by Merck KGaA ‘possible’

A takeover offer for Schwarz Pharma from Merck KGaA is possible, according to some analysts.

Last month Merck KGaA failed in a takeover bid for Schering AG, although it did purchase and sell Schering shares at a profit to the successful bidder, Bayer, after it looked like Merck was prepared to block the merger.

However, there is now talk in the markets that Merck KGaA may have turned its attention onto Schwarz – a move described as a possibility by one London banker.

He told Reuters: “Merck is an acquisitive company, and they’re prepared to do deals. They’ve had disappointments with their research pipeline and Schwarz has a pipeline, so there’s an obvious connection to be made.”

A hostile takeover from Merck, like the one attempted for Schering AG, would not be likely to succeed because the Schwarz family are the majority shareholders and would probably not accede to any offer that undervalued the company.

However, the banker told Reuters that other companies such as Altana and Serono had waited too long to find partners and were now finding it difficult to attract bidders.

He said: “The question is why sell now, before [Schwarz] launch all their pipeline drugs, and why sell to Merck, after the Schering deal fell through?”

Schwarz has traditionally been known as specialising in cardiovascular products, although it also has urology and neurological treatments. Merck KGaA also offers cardiovascular drugs, although it also has a growing oncology portfolio.

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