A Medical Device Daily

Bayer AG (Leverkusen, Germany) has reached agreement with Merck (Whitehouse Station, New Jersey) for Bayer to acquire all the shares of Schering (Berlin, Germany) held by Merck.

Bayer and Merck said that in the course of joint talks, they have agreed on the need to end the uncertainty regarding Schering's future. Merck has therefore decided to sell its 21.8% (according to the SEC) stake to Bayer at a price of EUR 89 per share, thereby clearing the way for Bayer's acquisition of Schering, a deal with a price tag of almost $22 billion.

All other Schering stockholders who have tendered their shares under the public takeover offer, or who decided to do so before the acceptance period expires at midnight CEST yesterday, will receive this price, which is EUR 3 above the original offer.

Bayer currently has just over 36% of Schering, including 11% bought from Allianz (Frankfurt, Germany).

“We're very pleased about Merck's decision, because a lengthy competitive bidding process would have greatly affected Schering's future,” said Bayer Management Board Chairman Werner Wenning. “All three companies concerned will benefit from this step. We are very optimistic that we can now secure at least the three-quarters of Schering's capital stock that we were aiming for, enabling us to quickly begin the integration process.”

Wenning added: “Today we have taken a major step toward creating a world-class German pharmaceutical company,” which will be named Bayer Schering Pharma.

He said the resulting combined company “will strengthen Germany's role as a pharmaceutical industry location,” which he said is “in the interests of the entire sector.”

Acquisition of Schering, the biggest deal in Bayer's 142-year history, will create a company with more than EUR 15 billion in sales annually. Bayer has said the transaction has potential synergy benefits of EUR 700 million a year from the third year onward and will lead to one-time charges of EUR 1 billion.

Bayer announced a bid at EUR 86 per share for Schering in March, beating a EUR 77-per-share offer from Merck. Merck withdrew its offer, but turned to buying shares in the market in an effort to thwart Bayer's bid.

Bayer and Merck said they agreed during their talks to look into “further possible opportunities for cooperation” between the two companies.

As part of the agreement, Bayer will withdraw the lawsuit it filed against Merck in New York on Tuesday.

In other dealmaking news:

• WebMD Health (Elmwood Park, New Jersey), a provider of online health information services to consumers and physicians, reported completing the previously disclosed acquisition of Summex (Indianapolis), a provider of health and wellness programs that include online and offline health risk assessments, lifestyle education and personalized health coaching by telephone. The deal was first announced in April (Medical Device Daily, April 18, 2006).

The deal included $30 million in cash at the closing of the acquisition and WebMD has agreed to pay up to an additional $10 million in cash over a two-year period if certain milestones are achieved. The price also is subject to customary post-closing adjustments.

WebMD Health is a subsidiary of Emdeon (Elmwood, New Jersey).

• Healthcare Realty Trust (Nashville, Tennessee) said it has entered into a definitive purchase agreement to acquire a freestanding orthopedic hospital and adjacent medical office facility in Indianapolis for about $65 million. The hospital has 42 licensed beds, 16 anesthesia care unit rooms and 10 operating suites. The adjacent medical office facility contains four operating rooms.

The company said it would enter into long-term net leases on the facilities with Indiana Orthopaedic Hospital and Orthopaedics-Indianapolis PC (OrthoIndy). The acquisition is expected to close shortly.

OrthoIndy ranks among the largest private full-service orthopedic groups nationwide. It operates 11 outpatient clinical locations and one surgery center, in addition to the Indiana Orthopaedic Hospital, in a six-county market.

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing and developing real estate properties associated with the delivery of healthcare services throughout the U.S. As of March 31, it had investments of some $2 billion in 250 real estate properties and mortgages in 27 states.

• The Cirrus Group (Dallas) has acquired Plano Pediatric Medical Pavilion (PPMP; Plano, Texas). PPMP, a multi-specialty pediatric medical office complex, currently houses a surgical center, a diagnostic imaging center, an urgent care center and other physician practices focused entirely on pediatric care.

Plano Pediatric Medical Pavilion is a two-story, 82,000-square-foot, Class A medical office building.