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Schering-Plough Will Sell Off Medicines To Win Buyout

U.S. pharmaceutical company agrees with European Commission to sell off several veterinary vaccines and medicines to acquire Akzo unit for $14.4 billion.

BRUSSELS, Belgium (AP) โ€” U.S. pharmaceutical company Schering-Plough Corp. has agreed to sell off several animal vaccines and medicines to win EU approval to acquire Organon Biosciences, the drug unit of Netherlands-based Akzo Nobel NV, for $14.4 billion (10.95 billion euros).
The European Commission said Thursday it had cleared Schering-Plough to buy Organon but its approval was conditional on the company selling off more than 20 drugs and trademarks for veterinary drugs in Europe.
It did not see antitrust problems with Schering-Plough's acquisition of Organon's human medicines, where it will gain an array of women's health products and bolster its late-stage pipeline of experimental medicines.
As originally structured, the approximately $4.9 billion (3.72 billion euros) in revenue from Organon Biosciences would have bulked up Schering-Plough's sales by about half, and reduced the New Jersey's drug maker's dependence on its cholesterol franchise.
But the company will now have to sell off vaccines for swine E. coli, equine influenza and tetanus, ruminant neonatal diarrhea, ruminant clostridia and multi-species rabies.
Schering-Plough said it agreed to divest certain animal health products in Europe.
It must also divest animal medicines such as endocrines for reproductive use, insulin, antibiotics and sulfonamides, antibiotics for intra-mammary mastitis treatment, euthanasia, parasiticides and anti-inflammatories.
''In all the markets where the commission identified competition concerns the transaction would lead to very high combined market shares or even a monopoly situation,'' regulators said.
Selloffs were the only solution because the EU investigation found that many of the drugs the companies offered were direct rivals.
The deal moves Schering-Plough into two new treatment areas: women's health and the central nervous system. Sales of Organon's contraceptives, which include NuvaRing and Implanon, totaled $669 million (508.51 million euros), according to Schering-Plough.
Revenue from Organon's pharmaceutical business, which includes an infertility treatment and a muscle relaxant, reached $3.4 billion (2.58 billion euros) last year.