Health and Healthcare
Merck's (MRK) New Merger, Another Way To Save Money
Published:
Last Updated:
Merck (MRK) is merging with Schering-Plough (SGP) in a deal that the companies say is worth $41.1 billion. In reality, Merck is making an acquisition. Its shares will be the currency to compete the deal and its CEO will run the new company.
No matter what they two companies have to say about “synergy”, the deal is based on saving money in a rough economy and in a world where Big Pharma companies are losing many of their profitable drugs as their patents expire.
The two firms said that the marriage would strengthen the companies by putting together they drug portfolios and R&D. That is almost certainly clear. But, buried in the announcement is the announcement that the merger will save $3.5 billion a year.
With Merck in a weakening position due to strong competition from generics and other Big Pharma companies fighting to keep their market shares, building a new company with lower costs is the key to the deal.
Douglas A. McIntrye
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
