After Merck & Co. officially announced its $41.1 billion merger with Schering-Plough yesterday, CEO Richard Clark made it clear his company is still looking to expand through further acquisitions and mergers.
According to the Wall Street Journal’s Health Blog:
Clark told us today that the newly combined company is “actively looking” for biotechs to buy or partner with…“We’ve gone much more external,” he said. As Clark noted, the combined company will generate about $15 billion in free cash flow each year to go hunting.
He also told the Associated Press that Merck already has $8 billion in cash it plans to use for future deals. The Schering-Plough merger makes Merck the second biggest company in the industry, and the deal comes on the heels of industry leader Pfizer’s deal earlier this year to buy drugmaker Wyeth.
By purchasing Schering-Plough, Merck hopes to benefit from the company’s biotech, animal care and consumer products divisions. The move expands Merck’s worldwide operations to encompass 140 countries and will help to soften the blow when Merck loses its patent on Singulair, the allergy drug that produces over $4 billion a year for the company.
Clark didn’t put forward information on layoffs expected to affect 16,000 employees, 15 percent of the companies’ combined workforce. Approximately 40 percent of Schering-Plough’s senior leaders will join the combined company, according to Merck’s press release, while Schering-Plough CEO Fred Hassan is leaving with a severance package reportedly worth $51 million.