Company's Biggest-Ever Transaction Successful: Bayer and Schering Optimistic About Their Common Future
June 21 2006 - 6:21AM
PR Newswire (US)
BERLIN and LEVERKUSEN, Germany, June 21 /PRNewswire-FirstCall/ -- -
Higgins to be Management Board Chairman of Bayer Schering Pharma AG
- Kostlin, Rubin, Riemann and Baumann will join the Management
Board - Wenning to become Supervisory Board Chairman of Bayer
Schering Pharma AG - Erlen will be Supervisory Board Vice Chairman
- Extraordinary Stockholders' Meeting of Schering AG in September
Following the success of Bayer's takeover offer for Schering, the
two companies are confident about their common future. "We will
combine two successful pharmaceutical companies to form a single,
even more powerful unit and create a leading global enterprise,"
said Bayer Management Board Chairman Werner Wenning at a joint news
conference on Wednesday in Berlin. "Schering is in excellent
shape," added Schering Executive Board Chairman Dr. Hubertus Erlen.
"Together with Bayer we now want to become even better. And the
chances of achieving this are good." The two chairmen announced
initial details of the upcoming integration process. An
extraordinary stockholders' meeting of Schering AG is planned for
September. After that the future "Bayer Schering Pharma,"
headquartered in Berlin, will be led by a new Board of Management
chaired by Arthur Higgins, who will also continue to head up the
entire Bayer HealthCare subgroup. Also on the Management Board of
Bayer Schering Pharma will be Dr. Ulrich Kostlin and Prof. Marc
Rubin from Schering, along with Dr. Gunnar Riemann and Werner
Baumann from Bayer. Kostlin will assume responsibility for the
Primary Care, Gynecology and Andrology, and Diagnostic Imaging
product groups, and will represent the business in Europe, Asia and
Japan. Riemann will head up the Oncology, Hematology and
Cardiology, Dermatology, and Specialty Therapeutics business units
and also assume responsibility for the North and South America
regions. Rubin will serve as head of Research and Development in
the new company, while Baumann will become head of Central
Administration and Organization. In this function, Baumann will
continue to be responsible for the entire Bayer HealthCare
subgroup. On the Board of Bayer Schering Pharma he will also hold
responsibility for Production and Human Resources. All the members
of the Board of Management of Bayer Schering Pharma will at the
same time be members of the Bayer HealthCare Executive Committee.
The three other current members of the Schering Executive Board -
Dr. Karin Dorrepaal, Prof. Rainer Metternich and Dr. Jorg
Spiekerkotter - have decided not to serve on the Board of
Management of Bayer Schering Pharma. The present Executive Board of
Schering AG will remain in office until the extraordinary
stockholders' meeting and assist with the integration. Schering
Executive Board Chairman Erlen will remain available to the new
company. Wenning said he is pleased Erlen has agreed to join the
Supervisory Board of Bayer Schering Pharma AG as one of its Vice
Chairmen. Due to the importance of the merger, Wenning himself
plans to take over the chairmanship of the new company's
Supervisory Board. Bayer already holds 88 per cent of Schering's
outstanding shares The acquisition of Schering is the Bayer Group's
biggest-ever transaction. The previous evening Bayer already
announced the final result of the first acceptance period for the
takeover offer. Bayer now controls 88 per cent of Schering's
outstanding shares. Of this figure, about 42 per cent were acquired
either on the stock market or directly, while a further 46 per cent
were tendered under the public takeover offer. Wenning emphasized
that all the remaining stockholders of Schering have the
opportunity to tender their shares to Bayer - also at a price of
EUR 89 per share - during the additional acceptance period, which
runs from June 23 until July 6. Regarding the turbulent final round
of the struggle for Schering, Wenning commented: "We are convinced
that from our point of view we have done the right thing. This is
backed up by the facts." He said Bayer has clearly exceeded the 75
per cent minimum acceptance threshold it set itself and will be
paying an acquisition price only slightly above its original offer.
Assuming Bayer is able to acquire all the remaining shares for EUR
89 each, the total transaction volume would rise from EUR 16.5
billion to just under EUR 16.9 billion. This represents an increase
of approximately 2.5 per cent. "A transaction of such dimensions
and long-term significance for Bayer surely justifies this
additional outlay," said Wenning, adding that he is confident the
additional expense can be more than offset through improvements in
the performance of the combined business. "That is one of the
reasons why I find the discussion about further job cuts
unnecessary." Wenning explained that Bayer had communicated openly
and transparently right from the beginning and throughout the offer
period. "We complied with the legal rules for such transactions at
all times, behaved fairly, explained our strategy in full and laid
our cards on the table for everyone to see." Addressing the
criticism voiced in some circles that Bayer responded much too
slowly to Merck's share purchases, he said Bayer, too, purchased
substantial share packages outside of the takeover offer within a
very short time. Unlike Merck, however, Bayer required the approval
of the U.S. Securities and Exchange Commission as soon as it wanted
to pay more than the original offer price. Although the SEC acted
swiftly, it still took several days for this approval to be
granted. Wenning: Equality principle in German takeover law
requires further substantiation Wenning therefore appealed to
lawmakers to further substantiate the principle of equality in
German takeover law. "While we were obligated to proceed according
to a detailed set of rules, Merck was able to operate more or less
freely in competition with us. I am convinced that the law needs
amending in this respect." Bayer's CEO stressed, however, that the
company is very satisfied with the process as a whole, with the
work of its advisers, the cooperation shown by the authorities, and
with the end result. Wenning said the planning for a rapid
integration process is already well advanced, with great importance
to be placed on transparency and fairness, in keeping with the
company's style. This involves in particular an open dialogue with
the employees' representatives. "We have always shown in the past
that we can work out good solutions together through constructive
and purposeful cooperation - solutions that take into account the
interests of the employees, the company and the stockholders
alike," said Wenning. "The integration of Schering is not intended
to produce winners on one side and losers on the other." Wenning
confirmed that Bayer Schering Pharma will be headquartered in
Berlin, as previously announced. He said the name clearly shows
that due account is being taken of the great tradition of the
Schering brand in conjunction with the Bayer brand. "Bayer Schering
Pharma is destined to become a national champion in pharmaceuticals
and to take its place among the world's top ten suppliers of
specialty pharmaceuticals." Based on 2005 figures, the new company
will have sales in excess of EUR 9 billion, making it the biggest
pharmaceutical company in Germany. Erlen: Merger of Bayer and
Schering presents a great opportunity Schering Executive Board
Chairman Erlen said he is relieved that Bayer's friendly takeover
of Schering has succeeded. "The acquisition adds considerable value
for our stockholders and presents a great opportunity to create a
powerful, world-class pharmaceutical company based in Berlin," he
declared. Bayer Schering Pharma will be an attractive partner for
patients and physicians in its specialized fields. The two
companies' businesses complement each other well and share the same
strategic alignment. One example of this is oncology, explained
Erlen. The merger will not only enable the new company to grow more
quickly overall. "We will also raise efficiency in research and
development, enabling us to create new therapies for diseases for
which there are currently no effective treatments." Erlen said that
despite the need for synergies, the merger will also open up many
opportunities for the employees, too, in the medium to long term.
"The expertise and experience of Schering's employees will not be
lost in the integration process. We have outstanding products and
are working on highly promising projects." "At our stockholders'
meeting in April," Erlen remarked, "I said that our dream of an
independent Schering had unfortunately come to an end. But I have a
new dream: Bayer Schering Pharma can become a powerful, global
pharmaceutical specialist. I look forward to that." Contacts: Bayer
AG: Gunter Forneck, phone +49-214-30-50446, Email: . Christian
Hartel, phone +49-214-30-47686, Email: . Schering AG: Schering AG:
Oliver Renner, phone +49-30-468-12431, Email: . Verena von
Bassewitz, phone +49-30-468-192206, Email: . Note to Editors: CVs
and photos of the future members of the Board of Management of
Bayer Schering Pharma are now available on the Internet at
http://www.bayer.com/ and http://www.schering.de/. Photos of the
news conference will be posted for download shortly afterwards.
Important information from Bayer AG: This is neither an offer to
purchase nor a solicitation of an offer to sell shares or American
depositary shares of Schering AG. The offer has been made by Dritte
BV GmbH, a wholly-owned subsidiary of Bayer AG, for all bearer
shares with no par value of Schering AG (including all bearer
shares with no par value represented by American depository
shares). The terms and conditions of the offer, including any
possible extension of the acceptance period in case of a competing
offer by a third party, have been published in the offer document
after the permission of the German Federal Financial Supervisory
Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht, BaFin)
has been obtained on April 12, 2006. Dritte BV GmbH also has filed
a tender offer statement with the U.S. Securities Exchange
Commission (SEC) with respect to the takeover offer. Investors and
holders of shares and American depositary shares of Schering AG are
strongly advised to read the tender offer statement and other
relevant documents regarding the takeover offer filed by Dritte BV
GmbH with the SEC because they contain important information.
Investors and holders of shares and American depositary shares of
Schering AG will be able to receive these documents free of charge
at the SEC's web site (http://www.sec.gov/), or at the web site
http://www.bayer.com/. This is not an offer of Bayer AG's
securities for sale in the United States. No such securities have
been registered under the U.S. Securities Act of 1933, as amended,
and no such securities may be offered or sold in the United States
absent registration or an exemption from registration. Any public
offering of securities to be made in the United States must be made
by means of a prospectus that contains detailed information about
the issuer, its management and its financial statements. Bayer AG
has been granted exemptive relief from the provisions of Rule 14e-5
under the U.S. Securities Exchange Act of 1934, as amended,
permitting it (or Dritte BV GmbH or certain of its other affiliates
or financial institutions on its behalf) to make purchases of
shares of Schering AG outside of the takeover offer until the end
of the offer period, subject to certain conditions. Accordingly, to
the extent permissible under applicable securities laws and in
accordance with normal German market practice, Bayer AG, Dritte BV
GmbH or its nominees or its brokers (acting as agents) may from
time to time make certain purchases of, or arrangements to
purchase, shares of Schering AG outside the United States, other
than pursuant to the offer, before or during the period in which
the offer is open for acceptance. These purchases may occur either
in the open market at prevailing prices or in private transactions
at negotiated prices. Any information about such purchases will be
disclosed as required by applicable securities laws. The
distribution of this announcement and the offer and sale of the
securities described in this announcement in certain jurisdictions
may be restricted by law. Any persons reading this announcement
should inform themselves of and observe any such restrictions. This
announcement may not be taken, distributed or transmitted, directly
or indirectly, in any form in or into Italy or Canada. This
communication is directed only at persons who (i) are outside
Italy, the United Kingdom, Canada or Japan or (ii) have
professional experience in matters relating to investments or (iii)
are persons falling within Article 49 (2)(a) to (d) ("high net
worth companies, unincorporated associations etc") of The Financial
Services and Markets Act 2000 (Financial Promotion) Order 2001 (all
such persons together being referred to as "relevant persons").
This communication must not be acted on or relied on by persons who
are not relevant persons. Any investment or investment activity to
which this communication relates is available only to relevant
persons and will be engaged in only with relevant persons. This
announcement is not an offer of securities for sale in Germany and
is not a listing prospectus according to the German Securities
Prospectus Act (Wertpapierprospektgesetz) as amended, the
Commission Regulation (EC) No 809/2004 of 29 April 2004 as amended,
or any other laws applicable in Germany governing the issue,
offering and sale of securities. Any investment decisions or
advices for investment decisions should only be made or given based
on a prospectus which also includes a section on risk factors.
Important information from Schering AG: Schering Aktiengesellschaft
has filed a solicitation/recommendation statement with the U.S.
Securities and Exchange Commission relating to the tender offer for
the ordinary shares and American depositary shares of Schering
Aktiengesellschaft by Dritte BV GmbH, a wholly owned subsidiary of
Bayer Aktiengesellschaft. Holders of ordinary shares and American
depositary shares of Schering Aktiengesellschaft are advised to
read such solicitation/recommendation statement because it contains
important information. Holders of ordinary shares and American
depositary shares of Schering Aktiengesellschaft may obtain such
solicitation/recommendation statement, and other filed documents,
free of charge at the U.S. Securities and Exchange Commission's
website (http://www.sec.gov/) and at Schering Aktiengesellschaft's
website (http://www.schering.de/). Certain statements in this press
release that are neither reported financial results nor other
historical information are forward-looking statements, including
but not limited to, statements that are predictions of or indicate
future events, trends, plans or objectives. Undue reliance should
not be placed on such statements because, by their nature, they are
subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results and
Schering AG's plans and objectives to differ materially from those
expressed or implied in the forward-looking statements. Certain
factors that may cause such differences are discussed in our Form
20-F and Form 6-K reports filed with the U.S. Securities and
Exchange Commission. Schering AG undertakes no obligation to update
publicly or revise any of these forward-looking statements, whether
to reflect new information or future events or circumstances or
otherwise. DATASOURCE: Schering AG CONTACT: Bayer AG: Gunter
Forneck, phone +49-214-30-50446, Email: . Christian Hartel, phone
+49-214-30-47686. Email: . Schering AG: Oliver Renner, phone
+49-30-468-12431, Email: . Verena von Bassewitz, phone
+49-30-468-192206, Email: .
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