Astra to Pay Merck $1.69 Bln as It Plans
Takeover by Zeneca
Bloomberg News
December 9, 1998, 3:23 a.m. ET
Astra to Pay Merck $1.69 Bln as It Plans Takeover by Zeneca
Stockholm, Dec. 9 (Bloomberg) -- Astra AB, Sweden's No. 1
drug company, said it will pay Merck & Co. at least $1.69
billion, freeing itself from some obligations it had in
conjunction with dismantling their joint U.S. sales venture, as
Astra plans to combine with Zeneca Group Plc.
Astra will pay Merck, the world's biggest drug company, an
initial fee of $740 million because it's teaming up with a rival.
In addition, it will pay $950 million to remove the first rights
Merck would hold to all products except antiulcer drug Losec, the
world's biggest selling prescription drug, in the U.S.
Today, Zeneca, the U.K.'s third-biggest drugmaker, agreed to
buy Sweden's Astra in a stock swap valued at $34.6 billion. Astra
in June removed an obstacle to any merger with another company by
taking full control of its Astra Merck joint venture with Merck,
which sells Astra drugs in the U.S.
Astra could pay Merck more in the future as it has an option
to buy out Merck's rights to royalties on Losec sales in the U.S.
Sold in the U.S. as Prilosec, the drug accounts for more than
half of Astra's revenue.
--Jenny Penser in the Stockholm bureau (46 8) 610 07 00/ph
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