Merck/Schering-Plough Merger Highlights (Update 1)

Merck and Schering-Plough’s CEOs are giving a run down of the benefits of the $41.1 billion merger, announced this morning, in a conference call with investors. Here are some of the highlights:

• Total price of the sale will be $41.1 billion or $23.6 per Schering share.

• This deal is structured as a reverse merger with Schering being renamed Merck. This is being done to avoid triggering a loss of rights, according to Merck.

• To pay for the merger, Merck is taking out a $3 billion 364-day bridge loan  and adding $5.5 billion in revolving credit. The company will be fronting $9.8 billion in cash, and another $22.8 billion will stem from merck stock.

• Schering share holders will own 32 percent of the new combined company, while Merck shareholders will  own 68 percent of the company.

• Joint company expects to save approximately $3.5 billion by 2011.

• There will be a job freeze for both companies beginning this morning.

• Complete transaction by Q4 2009.

• Remicade distribution rights between Schering and Johnson & Johnson are not expected to be in question, but Merck is prepared in case of legal problems. Question as to whether there will be a change of control.

• Synergies have not been defined beyond potential savings.

• Very little overlap in compounds with the exception of two late-stage programs in Hepatitis C and one other.

• Merck will gain access to Schering’s massive animal health product portfolio.

• Joint company will reside at Merck’s Whitehouse Station, New Jersey location.