|
Merck to acquire Rosetta
|
 |
May 11, 2001: 9:53 a.m. ET
No. 2 drug maker agrees to acquire biotech firm for $620M in stock
|
NEW YORK (CNNfn) - Merck & Co. Inc. agreed Friday to acquire gene research firm Rosetta Inpharmatics for $620 million in stock.
Merck (MRK: down $1.16 to $75.36, Research, Estimates) , the No. 2 drug maker behind Pfizer Inc. (PFE: down $0.40 to $43.34, Research, Estimates) said the merger will be considered a tax-free reorganization in which each Rosetta share will be converted into 0.2352 share of Merck, representing a value of $18 a share based on Merck's closing price of $76.52 Thursday.
Rosetta Inpharmatics (RSTA: up $7.29 to $17.20, Research, Estimates), based in Kirkland, Wash., develops tools and software for the pharmaceutical industry that are used in gene research and drug development. Competition in this field has stiffened since scientists completed a full map of the human genome last year.
Merck, based in Whitehouse Station, N.J., plans to leverage Rosetta's resources for its expanding genomics research and drug development, the company said.
"We realize that the availability of the human genome sequence is just the first step in a long process of identifying gene products and their functions," said Anthony Ford-Hutchinson, executive vice president of worldwide basic research for Merck. "Rosetta will be a tremendous asset in helping Merck more efficiently analyze gene data and intelligently select drug targets."
Rosetta will continue as an independent unit within Merck Research Laboratories with Stephen Frien, Rosetta's CEO, joining Merck as president of Rosetta and vice president, basic research.
The company will retain Rosetta's existing facilities in Kirkland and Bothell, Wash. As a wholly-owned Merck subsidiary.
Separately, Merck may be targeting rival drugmaker Schering-Plough (SGP: up $2.18 to $39.28, Research, Estimates) for a possible acquisition, according to a BusinessWeek magazine column. The magazine cites an unnamed investment banker "close to the industry" as saying Merck has proposed a deal valuing Schering at $91 billion, or $65 a share, but that Schering has turned down the bid.
Merck Spokesman Greg Reaves declined comment on the article. 
|
|
|
|
|
 |
|
