Schering-Plough offers €11bn for Organon

Schering-Plough said the deal would bolster its pipeline and add increased biologics manufacturing capabilities. The company now plans to move into the increasingly fertile vaccine market. The move continues a trend for large pharmaceutical companies to acquire 'speciality' companies to broaden their portfolios. Earlier this year Merck KGa wrapped up its acquisition of biotechnology company Serono, while a year ago Bayer bought Schering AG, a producer of speciality pharmaceutical products. The acquisition will add five late stage development drugs to Schering-Plough's pipeline as well as giving them access to Organon's biologics manufacturing plants. Shares of both companies rose after the news broke, with Akzo rising 16 per cent to €53.96. According to Fred Hassan, CEO of Schering-Plough, "(the acquisition) builds on our growing strength in primary care, giving us immediate access to central nervous system (CNS) and women's health care products." ​ "In light of Schering-Plough's expanding early pipeline, Organon BioSciences' strong biologics manufacturing capability is a further important asset for the combined company."​ Organon had top line sales of nearly $5bn (€3.8bn) in 2006, which accounted for one-third of Akzo Nobel's group sales, and almost half of its profits and is the world's third largest supplier of birth control pills. The company expects to achieve annual cost savings of $500m within three years of the deal closing, although so far has not commented on where they expect these to be generated. Organon's main products focus on the infertility, contraceptive and antidepressant markets, with no overlap with Schering-Plough's cholesterol, arthritis, hepatitis C and allergy product lines. DrugResearcher.com will take a closer look into the product line and pipeline matches later this week. Hassan said: "there will be no issue regarding selection of overlapping candidates for positions in the new organisation." ​ The acquisition of the recent spin off brings an end to Akzo's plans to take Organon public. Several private equity bidders had made offers, but Akzo turned the offers down claiming they were too low. They also stressed the importance of keeping the company intact to avoid excessive job losses from their international workforce of nearly 14,000. "We are convinced that we have found a good home for Organon BioSciences,"​ said Hans Wijers, CEO of Akzo Nobel.