Germany-based Hoechst AG said it expects to complete its $7.1billion takeover of Marion Merrell Dow by mid-summer and operateits new pharmaceutical division under the name Hoechst MarionRoussel.

Hoechst and Marion Merrell, of Kansas City, Mo., said Thursdaythey signed a definitive agreement on the acquisition, which wasproposed in late February. The deal is contingent on regulatory andshareholder approvals. (See BioWorld Today, March 1, 1995, p. 1.)

Hoechst, seeking a stronger presence in the lucrative U.S. drugmarket and an expansion into biotechnology, is offering $25.75 pershare for the 277 million outstanding shares of Marion Merrell.

About 71 percent of the stock is owned by The Dow Chemical Co.,of Midland, Mich., which will receive $5.1 billion in the buyout. Inaddition, Dow is selling its Latin American pharmaceutical businessfor $175 million to Paris-based Roussel Uclaf S.A.

Hoechst's pharmaceutical division, called Hoechst Roussel Pharma,is a collaboration with Roussel. Hoechst owns a majority interest andU.S. headquarters are in Somerville, N.J. Integration of MarionMerrell will change the name of the division to Hoechst MarionRoussel.

Marion Merrell's stock (NYSE:MKC) closed up 87 cents Thursdayto $25.12. Dow (NYSE:DOW) was down 37 cents to $69.12.

Hoechst said it will pay for the Marion Merrell acquisition with $2.5billion of its own money and finance the other $4.6 billion withexternal loans.

Hoechst's total 1994 sales in pharmaceuticals, agriculture productsand industrial chemicals were $30.6 billion. About 20 percent of therevenues, or $6.3 billion, were generated by Hoechst Roussel Pharmaand less than 40 percent were in North America.

Marion Merrell's 1994 sales were $3.1 billion, boosting the newgroup's anticipated yearly revenues to $10 billion. About two-thirdsof Marion Merrell's revenues were in the U.S. and Canada, givingHoechst a greatly expanded presence in the U.S.

In a prepared statement, Hoechst Chairman and CEO JurgenDormann said, "We need a partner with a strong North Americansales network, contacts with regulatory authorities and access to theinnovative field of biotechnology research in the U.S."

Marion Merrell has drug development collaborations with a varietyof biotechnology companies, such as Cortech Inc., of Denver,ImmuLogic Corp., of Waltham, Mass., Scios Nova Inc., of MountainView, Calif., and Oncogene Science Inc., of Uniondale, N.Y.

Hoechst and Marion Merrell did not detail any potential changes inthe two companies.

Dormann and Fred Lyons, chairman and CEO of Marion Merrell,will lead a committee overseeing the merger. Marion Merrell said noinformation was available on Lyon's plans after the transition isaccomplished.

Jean-Pierre Godard, head of Hoechst Roussel Pharma, will remain aschief of the pharmaceutical division and Marion Merrell's presidentand chief operating officer, Richard Markham, will be Godard'sdeputy.

In 1994, among Marion Merrell's biggest selling drugs wereCardizem for cardiovascular disorders, Seldane for allergies andCarafate for ulcers. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.