Merger firms are ‘fully committed’ to Ireland

MERCK, the drugmaker that has acquired Schering-Plough for $41.1 billion (€32.5bn), said both firms, which employ 2,000 people here, are “fully committed” to Ireland.

The company said it is too early to determine if there will be any job losses at its Irish operations.

“The impacts of this merger on the Irish market will be communicated in time but it is not clear yet,” said a spokeswoman for Merck.

Schering-Plough’s Irish spokesman refused to make any comment on the merger.

The Merck/Schering- Plough marriage follows on the heels of Pfizer’s $68bn (e54bn) purchase of Wyeth, another New Jersey-based pharmaceutical company.

Merck and Schering-Plough both recently announced significant job cuts worldwide and have been striving to become more efficient.

The transaction will generate savings of $3.5bn (e2.7bn) annually after 2011.

It will also double the number of experimental medicines Merck has in late-stage development to 18 and diversify Merck’s portfolio of medicines to include cardiovascular, respiratory, oncology, neuroscience and infectious disease.

Analyst Jeffery Holford said the merger seems “somewhat inevitable”.

“The industry needs to shrink because there is just not the same market for branded pharmaceuticals going forward as there has been over the last 10 years,” he said.

“There is overcapacity, and (Merck and Schering-Plough) need to take each other’s capacity out of the market.”

The deal will be financed with $9.8bn (e7.7bn) in cash, $8.5bn (e6.7bn) in debt and $22.8bn (e18bn) in Merck stock.

Merck chief executive Richard Clark will lead the combined company with Merck shareholders owning a stake of about 68%. Merck, which said it would maintain its dividend, expects the deal to add modestly to operating earnings in the first full year following completion and “significantly” after that.

The combined 2008 revenues of the two companies totalled $47bn (e37bn) and Merck believes it will maintain its present credit ratings.

Merck employs about 450 people in Ireland and has been here since 1976. Schering-Plough has been here since 1956 and employs about 1,300 people.