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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: Henry Niman who wrote (16610)	3/7/1998 8:14:00 AM
From: Henry Niman	Respond to of 32384

Here's what the FT had to say about more mergers: Astra: Swedish group seeks suitors for overseas merger SATURDAY MARCH 7 1998 By Tim Burt in Stockholm Astra, the Swedish pharmaceuticals group, is contemplating an international merger to consolidate its position as one of the world's leading drugs manufacturers. The company, which produces Losec - the world's best-selling prescription drug - yesterday identified Zeneca of the UK and Schering-Plough of the US as potential suitors. Hakan Mogren, chief executive, also described the pharmaceuticals division of Bayer of Germany as another "attractive" candidate. He emphasised that no formal talks were under way, and the company made clear it was not committed to a merger; it was also considering smaller bolt-on acquisitions and the development of new research projects. Shares in Bayer rose 3.6 per cent to DM78.10 yesterday, while Zeneca rose 33p to close at œ26.48. In midday trading in New York, Schering-Plough was quoted at $73 9/16, up $1 3/8. Astra's most commonly traded A shares rose SKr8 to SKr169 in Stockholm after the company said: "A merger of equals is a possibility that we are considering. We are assessing a number of possible combinations." Senior company officials said the group could spend about SKr125bn ($16bn) on such a deal, using liquid funds of SKr25bn and by gearing up its balance sheet. They said a merger was more attractive than an acquisition, which could lead to significant goodwill write-offs. Astra said the review reflected the slowing organic growth of some of its products, of which Losec accounts for almost 50 per cent. "Before, when we had such a high rate of organic growth, there was no room for a merger," Mr Mogren said in a press briefing. "Now, when our rate of growth has slowed down, it is an option." Industry analysts expressed surprise that Mr Mogren should name Astra's possible merger partners, and pointed out that any deal would be complicated by the Swedish group's existing link-up with Merck of the US. The US group jointly distributes Losec in the US and has rights over Astra's future products there. Analysts also said that Astra's merger overtures signalled the company's readiness to reassess its strategic options before patent protection over Losec expires in a few years. Merger activity in the pharmaceutical industry has been overshadowed in recent weeks by the collapse of the proposed merger of Glaxo and SmithKline Beecham. Elsewhere in the industry, the 1995 merger between Pharmacia of Sweden and Upjohn of the US has failed to deliver the returns promised to shareholders.