Shareholders of Merck & Co. (MRK) and Schering-Plough Corp. (SGP) voted Friday in favor of the drug makers' merger, hitting a milestone on the way to the deal's expected closing later this year.

Merck shares rose $1.11, or nearly 4%, to $30.49; Schering shares rose 79 cents, or 3%, to $26.83.

More than 99% of the votes cast by each company's shareholders were in favor of what amounts to a Merck takeover of Schering-Plough in a cash-and-stock deal valued at $41 billion when it was announced in March. Merck's special shareholder meeting was in Bridgewater, N.J., while Schering's was in Boston.

The merger is still subject to antitrust clearance. Merck likely resolved regulatory concerns about the companies' overlapping animal-health assets with last week's agreement to sell its 50% stake in the Merial animal-health joint venture to partner Sanofi-Aventis SA (SNY) for $4 billion.

Merck, which has been beset by patent expirations and research setbacks, is gaining access to a relatively strong research pipeline through the Schering deal. Schering shareholders were lured by the deal's 34% premium to the stock price shortly before the deal was announced.

Merck and Schering structured their deal as a reverse merger, in which Schering will be the surviving corporation but will have Merck's name and be controlled by Merck's board and top management. The structure is designed to ensure that the post-merger Merck retains marketing rights to arthritis drugs including Remicade. Schering co-markets the drugs with Johnson & Johnson (JNJ), but their agreement has a change-of-control provision under which full rights to the drugs would revert to J&J if Schering were taken over.

J&J has claimed the change-of-control clause was triggered by the Merck-Schering deal. The dispute is headed toward arbitration, though some analysts believe the parties will eventually settle the case.

Merck, of Whitehouse Station, N.J., has said the arbitration process could take awhile and linger even after the Schering deal closes.

Schering-Plough, of Kenilworth, N.J., said Friday it expects the combined company to continue the dividend policies of Merck, currently a quarterly cash dividend of 38 cents per share.

-Peter Loftus; Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com