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Associated PressTRENTON, N.J. – Merck & Co. is buying Schering-Plough Corp. for $41.1 billion in a deal that gives Merck key new businesses, access to a promising pipeline of new products and the chance to cut costs by $3.5 billion more per year, including eliminating about 16,000 jobs.
Merck hopes the cash-and-stock deal helps it better compete in a drug industry facing slumping sales, tough generic competition and intense pricing pressures.
The deal announced Monday would unite the maker of asthma drug Singulair with the maker of allergy medicine Nasonex and form the world's second-largest prescription drugmaker. Merck and Schering are already partners in a pair of popular cholesterol fighters, Vytorin and Zetia, although concerns about their safety and effectiveness have hurt sales for the past year.
Shares of the two companies traded furiously after the announcement — more than three times the normal daily volume of Schering-Plough shares had changed hands barely an hour after the market opened — with Schering's shares skyrocketing and Merck's dropping, typical for a company doing a big acquisition. In mid-morning trading, Schering shares jumped 20 percent to $21.14 and Merck shares, after plunging about 8 percent, recovered to $22.28, down 2.1 percent.
The latest deal comes only a few weeks after Pfizer Inc. agreed to pay $68 billion for Wyeth.
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