The pharmaceutical industry has seen a ton of deals over the past few years, some $230 billion in M&A activity from the top 10 pharmaceutical companies alone since the beginning of 2007.

But with plenty of players since on the board, there's likely to be some more hefty spending through 2010.

2010

March 9: Drug makers Sanofi-Aventis SA and Merck & Co. say they will combine their animal health businesses in a 50/50 joint venture that would have sales of more than $5 billion, creating a new leader in the fast-growing veterinary medicines sector. - Paul Whitfield

March 2: Pharmaceutical giant Pfizer Inc. becomes the latest to enter the fray for German generics maker Ratiopharm GmbH after financial investors last month failed to make the latest round of bidding. - Andrew Bulkeley

March 1: Merck KgaA rolls out a $7.2 billion cash and debt agreement to buy U.S. drug-development supplier Millipore Corp. for $107 per Millipore share, a 13% premium to the stock's Friday close. - Andrew Bulkeley

March 1: AstraZeneca plc says it will exercise an option to take back full rights to certain drugs marketed in the U.S. from American rival Merck & Co. in exchange for $647 million. - Peter Moriera

March 1: Japan's Astellas Pharma Inc. makes an unsolicited $3.5 billion all-cash offer for OSI Pharmaceuticals Inc. after its invitations to negotiate a deal with the American company drew no satisfactory response. The offer price represents a premium of more than 40% to OSI's closing price Friday of $37.02. - Peter Moriera

Jan. 4: Novartis to buy out Alcon: Novartis, of Basel, Switzerland, says it would pay Nestlé $180 per Alcon share, or $28.1 billion, for its 52% stake and offer remaining shareholders 2.8 Novartis shares for each Alcon share. - Laura Board and Andrew Bulkeley

2009

Nov. 18: Bayer's plastics unit may be in play: In a report Tuesday, Bloomberg noted that Abu Dhabi-run International Petroleum Investment Co. is talking with Bayer about a possible joint venture involving Bayer's MaterialScience plastics unit. The story followed earlier reports that IPIC was in talks to acquire the Bayer unit, which accounted for about 20% of Bayer's sales through the first nine months of 2009. - Suzanne Stevens

Nov. 10: Pfizer slashing R&D footprint by 35%: The pharmaceutical giant on Monday announced plans to consolidate 20 R&D centers into five central hubs as part of its integration of Wyeth. - Suzanne Stevens

Nov. 4: Merck-Schering day one: Merck & Co. (NYSE:MRK) closed its $41.1 billion acquisition of Schering-Plough Corp. (NYSE:SGP). The deal makes Merck the world's No. 2 drugmaker behind industry juggernaut Pfizer Inc. (NYSE:PFE), which had its own Day One on Oct. 16 after its $68 billion acquisition of Wyeth. - Baz Hiralal

Oct. 22: Merck, Schering integration planning on track: Teams from Merck & Co. (NYSE:MRK) and Schering-Plough Corp. (NYSE:SGP) are meeting to get anjump on what could be a complex integration. Merck is acquiring Schering for $41.1 billion. The deal is expected to close in the fourth quarter. In its third-quarter earnings announcement on Thursday, Schering noted that "pre-integration planning teams [from the companies] have been meeting collaboratively to plan for a smooth and effective integration." - Suzanne Stevens

Oct. 18: Pfizer third-quarter earnings preview: Analysts polled by Thomson Reuters expect, on average, earnings per share of 48 cents and revenue of $11.42 billion. In the year-earlier period, earnings per share were 34 cents, and revenue was $11.97 billion. - Sara Behunek

Oct. 16: Doozy of a Day One for Pfizer-Wyeth R&D: On Wednesday, Pfizer Inc. (NYSE:PFE) received  approval from the FTC for its $68 billion acquisition of Wyeth. Friday is Day One for the combined companies. The mood at the two giant organizations no doubt varies by function and location. But a juxtaposition of two facts in a Bloomberg report suggests the swirl of emotions researchers at the two companies may be feeling. - Kenneth Klee

Oct. 15: FTC approves Pfizer's $68B deal for Wyeth: Pfizer Inc. obtained antitrust approval from the Federal Trade Commission Wednesday for its $68 billion acquisition of Wyeth, conditioned on divestitures in animal health products. - Cecile Kohrs Lindell 

Oct. 1: Pfizer, Wyeth ruling in China highlights new regs: The approval by Chinese regulators of Pfizer Inc.'s (NYSE:PFE) $68 billion merger with Wyeth (NYSE:WYE) earlier this week offers another glimpse into just how open China will be to foreign investment under its new anti-monopoly law. The conditional clearance -- under which Pfizer will have to divest certain animal health assets in China -- was the fourth deal to come before the Chinese regime under regulations that took affect in August 2008. - Suzanne Stevens

Bristol-Myers is apparently on the hunt for even more acquisitions, according to Reuters. So what pharma companies are still left to be acquired?

• Crain's says Biomarin Pharmaceutical Inc. (NASDAQ:BMRN), Rigel Pharmaceuticals Inc. (NASDAQ:RIGL) and Connecticut-based Alexion Pharmaceuticals Inc. (NASDAQ:ALXN) could be possible targets for Abbott, Bristol-Myers Squibb Co., Eli Lilly and Co. (NYSE:LLY) and Johnson & Johnson.

• Vertex Pharmaceutical Inc. (NASDAQ:VRTX), which creates Telaprevir, a hepatitis C (HCV) drug, could be a target for Johnson & Johnson, Bristol-Myers Squibb, or Gilead Sciences Inc. (NASDAQ:GILD) , according to BusinessWeek.

Sept. 22: Boehringer Ingelheim buys Wyeth assets: German pharmaceutical group Boehringer Ingelheim GmbH on Tuesday said it would use Pfizer Inc.'s $68 billion acquisition of Wyeth to boost its pet and agricultural animal portfolios in North America, Europe, South Africa and Australia. Boehringer, of Ingelheim, said it would acquire most of Wyeth's Fort Dodge animal health portfolio, which is based in its namesake Iowa city and reportedly had sales of $250 million last year. - Andrew Bulkeley

July 21: Wyeth investors back Pfizer buyout: Wyeth shareholders voted late Monday, July 20, to approve New York-based Pfizer Inc.'s cash-and-stock buyout of the Madison, N.J. drug giant. The deal was valued at $68 billion in January. European Union regulators on July 17 gave the deal a green light conditioned on divestment of parts of Pfizer's animal-health business. - Alex Lash

July 17:EC approves Pfizer-Wyeth merger: Pfizer Inc. said Friday, July 17, that the European Commission has approved its $68 billion takeover of drugmaker rival Wyeth. The regulatory arm of the European Union said its decision includes Pfizer's promise to sell some animal health businesses in Europe. - Alex Lash and Greg Johnson

June 17: Wyeth's R&D chief tightlipped on Pfizer: Wyeth's (NYSE:WYE) head of pharmaceutical research Mikael Dolsten has already accepted a job at Pfizer Inc. (NYSE:PFE), which is buying his company for $68 billion, but at an industry conference in San Francisco on Wednesday he barely mentioned his new boss as he touted several drugs in Wyeth's pipeline. In fact, in a 45-minute presentation that went into the clinical data for pipeline candidates for Alzheimer's, cancer and rheumatoid arthritis, Dolsten wouldn't have mentioned Pfizer at all if the subject of divestiture hadn't come up in a post-speech Q&A. The question made perfect sense. Pfizer this year began an aggressive outlicensing campaign for dozens of compounds it wants to clear from its portfolio.- Alex Lash

June 5: Deep cleansing treatment: As Pfizer Inc. swallows rival Wyeth for more than $60 billion, it's trying to clean out its pipeline. Pfizer is trying to out-license more than 100 drugs from discontinued research areas such as cardiovascular disease that for years were at the heart of Pfizer's business. Though in the shadow of the company's steady inflow of products, these efforts serve as a gauge of Pfizer's seriousness in streamlining its massive bureaucracy, which executives are promising even as they begin trying to integrate Wyeth and its 48,000 employees.

June 4: Merck puts animal health units up for sale: As it prepares to merge with rival Schering-Plough Corp., Merck & Co. is testing the waters for both companies' animal health businesses. The Wall Street Journal has put a $13 billion tag on the assets, but it is not believed Merck is looking for a complete divestiture of both units. The Whitehouse Station, N.J., pharmaceuticals giant said Thursday that it is also exploring options for its 50% stake in the Merial Ltd. joint venture agreement and Schering-Plough Corp.'s animal health division. - Demitri Diakantonis and Lisa Allen

June 3: GSK's Witty on new biopharma R&D setups: Combining traditional pharma R&D with the biotech version -- high risk, high reward, highly creative and often fueled with some good jolts of venture capital -- seems to be the preferred solution to the productivity problems that ail the Big Pharma companies. But how do you go about it? The industry is finding out as it lets a thousand flowers bloom. Or at least three or four. - Kenneth Klee

June 3: Pfizer finds eager buyers for debt: Pfizer Inc. said Wednesday it has raised about $10.5 billion in euro- and sterling-denominated debt to help fund its blockbuster buyout of drug rival Wyeth. - Alex Lash

June 2: More musings on pharma megamergers: Pfizer's $68 billion acquisition of Wyeth and Merck & Co.'s $41 billion bid for Schering Plough Corp. sparked fresh speculation on whether pharma megamergers create value and whether industry consolidation would continue. We've done our share of analysis. Recently, Baz Hiralal posted this solid roundup of possible buyers and sellers among industry heavyweights, and Alex Lash reported on the anti-megamerger attitudes of the chief executives of Eli Lilly and Co. and GlaxoSmithKline plc. - Suzanne Stevens

May 27: Pfizer's spinning strategy: How's this for a sign of the times: One of the most innovative drug industry deals of the year involves the biggest firm of them all, Pfizer, but it isn't its $68 billion takeover of Wyeth. Instead, the pundits at Windhover Research's In Vivo blog say Pfizer is breaking new ground in its joint venture with rival GlaxoSmithKline. - Alex Lash

May 20: Pfizer expands, this time with generics deal: As Novartis AG finally uses some of the $5 billion it raised to acquire the generic injectables business of Austria's Ebewe Pharma GmbH, Pfizer is expanding in India. - Baz Hiralal

April 28: The first high-profile casualty of the Pfizer-Wyeth merger has emerged. Pfizer's biotech chief is stepping down after less than two years on the job. - Alex Lash

April 23: Three more pharma megamergers to go? London-based pharma market intelligence report publisher URCH Publishing, which itself recently acquired pharma research firm Spectra Intelligence, is making predictions about who among the top 10 pharmas will follow in the footsteps of the sector's three biggest deals this year, with Bristol-Myers Squibb Co., Bayer AG and Novartis AG being among some of the candidates. - Baz Hiralal

April 16: Glaxo, Pfizer to combine HIV units: Pharmaceutical giants GlaxoSmithKline and Pfizer  announced plans to create a company that would combine their HIV research and drug development programs. - Lou Whiteman

April 13: Pfizer tries acquiring 34% of Indian unit on the cheap: New York's Pfizer wants to take control of its Indian unit. Through indirect subsidiary, Pfizer Investments Netherlands BV, it will offer to acquire a 33.77% stake in Pfizer Ltd. from public shareholders at 675 rupees ($13.53) per share in a deal valued at about $136 million. - Baz Hiralal

April 7: Wyeth execs to get senior spots at Pfizer: After Pfizer completes its $68 billion acquisition of Wyeth in the third quarter, it will retain eight senior executives from Wyeth and create two distinct research organizations to capitalize on their respective strengths in pharma and biotech. - Baz Hiralal

March 24: A whole new ballgame: Recent big-ticket pharma deals illustrate the evolution of financing outs and breakup fees. - Marilyn Sonnie, Jones Day

March 13: Pfizer spreads risk on Wyeth deal: The drug giant says 29 more banks will help lend it the cash it needs to take out rival drug firm Wyeth.- Alex Lash

March 9: Merck, Schering-Plough merge: Where do competitors stand? The trend of merging pharmas continued with Merck and Schering-Plough announcing they would merge in a cash-and-stock deal worth $41.1 billion. The deal makes Merck the No. 2 drugmaker in the U.S. So what does that mean for  competitors like Bristol-Myers and GlaxoSmithKline? - Baz Hiralal

March 3: Pfizer, Sanofi acquire generics as pipelines shrink: The deal may not be quite as big, but Pfizer recognizes the importance of the generic drug market. - Baz Hiralal

Feb. 24: So maybe Pfizer will hang on to Advil and Chapstick; Feb. 13: Video: Louis Capital's van Batenburg on Pfizer-Wyeth obstacles; Feb. 9: Pfizer's Kindler offers Wyeth integration preview; Feb. 6: Pfizer taps Cadwalader for Wyeth advice; Pfizer's Wyeth conundrum: Cutting jobs, retaining talent.

Feb. 4: Here comes pharma's 'me-too' mergers: The pharmaceutical industry is notorious for creating copycat drugs. Now Pfizer's $68 billion bid for Wyeth could prompt Merck, Sanofi-Aventis and other peers to launch "me-too" mergers. - Alex Lash

Jan. 29: Wyeth's kill fee, and much much more: Pfizer and Wyeth just released their merger agreement, and there are plenty of details to chew over. - Alex Lash

FLASHBACK

Back in September, Lash wondered whether Pfizer was in the hunt for a big deal. Yes, it turned out. The company agreed Jan. 26 to acquire Wyeth for $68 billion. It didn't mean investment banking was back, The Deal editor-in-chief Robert Teitelman notes, but did offer hope that the "deal economy lives," he wrote. Meanwhile, Corporate Dealmaker was awaiting Pfizer-Wyeth's self-proclaimed 'unique and flexible business model.' (Which it did get more on.) And back in 2007, Lash questioned whether indeed Pfizer should buy Wyeth.

"A megadeal for Pfizer has been anticipated for several years as a move to pre-empt the major loss of revenue the group faces in 2011, when it loses the patent on its blockbuster Lipitor cholesterol treatment," Lash, Peter Moreira and Laura Board wrote Jan. 26.

But back to September. At the time, biotech ImClone Systems Inc., which was fending off Bristol-Myers Squibb Co.'s $60 per-share-offer, said it was fielding a $70-per-share bid from a big pharma company (which turned out to be Eli Lilly and Co., which ultimately won the target). The news came just days after a rumor surfaced that Pfizer could swallow Bayer AG.

While the first possibility seemed plausible, The Deal's Alex Lash wrote, as Pfizer has plans to expand its presence in biotech and had recently reorganized its oncology operations, the second seemed to be just a rumor, while, he wrote, Pfizer's woes were all too true.

The company has had several drugs tank or run into serious hurdles over the last few years, and news on its latest setback came Sept. 9. The poor track record was the backdrop to the Bayer speculation, he wrote:

But Pfizer's struggles are no rumor. Because of the revenue gap when cholesterol fighter Lipitor and its $13 billion in annual sales go off-patent in 2011, Pfizer is usually on the list of suitors when a major drug firm is rumored on the block.

• Earlier in September, Pfizer picked up the rights to Medivation Inc.'s experimental Alzheimer drug Dimebon for $225 million, a bet that could cost it $725 million.
• Rounding out August, Pfizer and Bristol-Myers ran into a setback on the apixaban blood thinner they co-developed, saying they won't submit it for FDA approval in 2009 as they had hoped to do.
• In May, the drug giant hired a former Eli Lilly oncology expert to run its new cancer division.
• In March, Pfizer picked up venture-backed Serenex Inc. for its early-stage cancer drug and discovery technology, Lash noted. No financial terms were disclosed, but the startup took $81 million in venture backing.
• Pfizer unveiled plans Feb. 20 for a $195 million deal for Encysive Pharmaceutical Inc. to bolster its offerings targeting high blood pressure. The target in July 2007 said it had tapped Morgan Stanley to weigh strategic options, the month after the FDA failed to approve Encysive's Thelin drug, which treats pulmonary arterial hypertension, for the third time. Thelin is on the market in Europe, and Feb. 20's deal comes after Pfizer's patent on blood pressure drug Norvasc expired in 2007, as AP pointed out. 
• The New York drug titan in January teamed up with Scil Technology GmbH in a $250 million licensing deal for the latter's osteoarthritis drug treatment. (On a tangent, Northwestern University, where the Pfizer-manufactured pain management drug Lyrica was born, unveiled in December one of the largest drug royalty deals ever, a portion of its royalty interest in Lyrica to drug fund Royalty Pharma for $700 million cash.)
• Pfizer in November picked up Coley Pharmaceutical Group Inc. in a $164 million deal for access to a new type of immune system drugs. 

WHAT PFIZER WANTS

On the larger end, not too many months go by without Pfizer being mentioned, in passing or more seriously, as a prospective buyer of a peer. One analyst's report in August 2007 sparked Lash's assessment of the company's position:

Beset by cost cutting, layoffs and high-profile drug failures, what's a big pharma to do? How about spend $90 billion to take out a competitor?

That's what a Wall Street drug industry analyst recommends for Pfizer Inc., the troubled, top-heavy drug giant in the midst of a drastic restructuring from its executive suite to its far-flung labs and sales offices. In a report released Monday, Aug. 20, Credit Suisse Group analyst Catherine Arnold wrote that Wyeth Pharmaceuticals Inc. is ripe and Pfizer should do the plucking.

Arnold argued Pfizer should get on board because of Wyeth's biologics business, a highly lucrative area. Indeed, on the biotech front, Lash noted in May 2007: "Part of the buying frenzy is fueled by the peculiar state of drug giants such as Pfizer Inc., AstraZeneca plc and Merck & Co., all with plenty of cash and a desperate need for new products." But, Lash wrote:

Doesn't Pfizer have enough to worry about? That includes more than 10,000 layoffs the past two years, the imminent patent expiration of the $13 billion a year cholesterol drug Lipitor and the late-stage failure of its expected replacement, torcetrapib, and the drive to cut billions of dollars in spending. ...Pfizer does need to do something. Of the eight major U.S.-based drug companies, Credit Suisse estimates only Pfizer will have a negative growth rate through 2011.

Could Pfizer go after Bristol-Myers? Tara Croft examined the question in June 2007:

With drugs to treat heart disease such as Accupril and Norvasc and cholesterol drug Lipitor, New York-based Pfizer has a major cardiovascular franchise; it could be interested in Bristol for Plavix. But analysts think Plavix may not be enough, revenuewise, for Pfizer to make a move, especially with its pending patent expiration. [Citigroup Inc. analyst George] Grofik agrees. Pfizer, he says, is focused on implementing its $4 billion restructuring program -- "a venture that limits its appeal as an acquirer in the near-term."

In March 2007, Lash examined whether biotech biggie Amgen Inc. was primed for a buyout.

[Deutsche Bank Securities Inc. analyst Jennifer] Chao and other analysts say any prospective buyer would need $100 billion, a price tag beyond the means of all but the largest pharmaceuticals companies. "It could be attractive for a very large pharma [like] Pfizer [Inc.], but probably not too many others," says biotech analyst Eric Schmidt of Cowen and Co. LLC.

It was also thought Pfizer could bust in on Kos Pharmacueticals Inc.'s $3.7 billion deal with Abott Laboratories Inc. in December 2006 after Pfizer stopped human trials of its good cholesterol drug torcetrapib. Kos has its own HDL therapies. Analysts at the time also weighed in on other potential targets for Pfizer.

TEAMING UP

While the M&A questions kept popping up, it seemed like the company could gravitate toward lower-risk moves and licensing deals rather than major buys. In May 2007, Croft noted:

Merck & Co. spent 10 years and more than half a billion dollars trying to prove that its Zocor cholesterol drug was better than Pfizer Inc.'s Lipitor. Unfortunately, the majority of cholesterol drug prescribers and takers weren't convinced. And neither, apparently, was Merck. The company announced in March that it is collaborating with Schering-Plough Corp. to develop a combination drug that uses Lipitor. ...

Rivals though they may be, Whitehouse Station, N.J.-based Merck and Kenilworth, N.J.-based Schering-Plough are teaming up to take advantage of Pfizer's misfortune. The two companies are collaborating on the development of a pill that combines Schering-Plough's Zetia cholesterol drug with the chemical compound that is Lipitor, or atorvastatin, and, although no formal marketing deal is yet in place, they said it will go on the market after Lipitor goes off patent in 2010.

The news came weeks after Pfizer and Bristol-Myers unveiled a $250 million deal to spread risk and team up in the development of apixaban. Such deals, Lash predicted, would be more likely for Pfizer going forward rather than any huge acquisitions. Despite a recent setback, if the drug goes to market, Pfizer could pay out another $750 million.

Meanwhile, venture investing has also been part of its strategy.

COUGHING IT UP

In a major restructuring, Pfizer sold its consumer products division to Johnson & Johnson in 2006 for $16.6 billion. The FTC Dec. 12 granted the deal's approval, with divestitures. The deal was conditioned upon completing the sale of four units -- three Pfizer lines and one from J&J -- including Pfizer heartburn remedy Zantac to Germany's Boehringer Ingelheim GmbH for $509.5 million and Pfizer's Cortizone hydrocortisone anti-itch business and Unisom sleep aid business, as well as J&J's Balmex diaper rash treatment business to Chattanooga, Tenn.-based Chattem Inc., announced as part of a $410 million deal in October.

J&J agreed in June to buy Pfizer's over-the-counter division, ending a long, hotly contested auction.

Earlier this year, Pfizer indicated a spinoff could create a standalone entity worth $10 billion in public markets, making it unlikely at the time that the unit would go for a sale price less than $12 billion to $14 billion, bankers told The Deal in early May that year.

• A spinoff would have been tax-free, but the company switched gears to an auction after suitors showed strong interest.
• Second-round bidders included Reckitt Benckiser plc, which makes Lysol and Woolite; Colgate-Palmolive Co.; and fellow pharmaceutical heavyweight GlaxoSmithKline plc, according to sources. At the time, others were thought to include Novartis AG, Procter & Gamble Co. and the recent victor, Johnson & Johnson.

SHOPPING SPREE

Pfizer itself had been on an acquisition run. The company in April 2006 agreed to pay Germany's Schwarz Pharma AG $210 million for the rights to an incontinence medicine. The same month, Pfizer said it would acquire South San Francisco, Calif.-based Rinat Neuroscience Corp., which develops drugs aimed at treating Alzheimer's disease and chronic pain, for an undisclosed amount (reportedly near $500 million).

Other notable then-recent Pfizer deals include:

• gaining FTC approval in October 2006 for its licensing deal for a portfolio of treatments for Alzheimer's disease and other conditions from Transtech Pharma Inc. with $155 million in upfront and near-term payments;
• another deal in October 2006 to acquire private British drugmaker PowderMed Ltd. and get into vaccines;
• taking Vicuron Pharmaceuticals Inc. and two late-stage antibiotic treatments in June 2005 for $1.9 billion;
• offering up $298 million for Idun Pharmaceuticals Inc.;
• paying up to $527 million for Angiosyn Inc., a preclinical research startup;
• a licensing deal with Incyte Corp. worth up to $800 million.

MERCK-SCHERING

After it failed to win German birth-control maker Schering AG in 2006, drug titan Merck KGaA put its generics division on the block and has sold it to Mylan Laboratories Inc. for $6.6 billion. The deal nearly triples Pittsburgh-based Mylan Labs' revenue.

First round bids reportedly came due March 8 for the unit, which at the time was believed to go for up to $6.1 billion, according to some estimates. Citing a report in India's Economic Times, Reuters said March 16, 2007 Barr Pharmaceuticals Inc. and Germany's Stada Arzneimittel AG are out of the running. On the short list, it seemed, were Ranbaxy Laboratories of India, Israeli Teva Pharmaceutical Industries Ltd, Iceland's Actavis and Mylan Labs.

But the unit didn't deter private equity eyes--Carlyle Group, Kohlberg Kravis Roberts & Co. and Warburg Pincus were reportedly eying the unit, while Bain Capital and Apax Partners are also said to be teaming up for a bid.

Auction buzz first surfaced Jan. 4 and Merck confirmed a day later that it was indeed considering a sale. Merck had hoped to close a sale by mid-year, Reuters said in March. The sale proceeds will help pay for Merck's $13.3 billion purchase of Switzerland biotech Serono SA last year.

A divestiture is strategic, wrote The Deal's Andrew Bulkeley in January: "Off-patent medicines command a large -- and expanding -- portion of the pharmaceuticals market, but they carry small margins and tie up cash that pharmaceuticals groups such as Merck need for developing blockbuster drugs. Novartis kicked off this round of consolidation two years ago with the $16 billion purchase of Germany's Hexal AG and sister U.S. business Eon Labs Inc."

A go at the unit wouldn't have been the first such for KKR. Alongside Blackstone Group LP last year, the firm was left empty-handed in the auction for Croatian generics maker Pliva d.d. In the final bidding round, Woodcliff Lake, N.J.-based Barr Pharmaceuticals Inc. beat out Iceland's Actavis Group hf and acquired the company for $2.5 billion.

ALL'S FAIR

The auction follows a lengthy bidding war in which Merck went head-to-head with Bayer AG for Schering, ultimately losing out to a sweetened, $21.7 billion bid.

It looked like Merck KGaA had ended its pursuit of the German birth-control maker in mid-June, clearing the way for Bayer AG's $20.6 billion takeover of the highly coveted target by agreeing to sell the rival its stake for $4.7 billion. But as of July 12, Bayer failed to hit its squeeze-out target after its $21.7 billion (increased to €89 a share from €86 a share, after a last-ditch effort from Merck to grab the company) bid landed the drugmaker with 92.4% of its target.

Bayer is still working on the squeeze out.

STOCK PILING

While Leverkusen, Germany-based Bayer was set to close its $20.6 billion white knight offer for Berlin-based Schering, uber-hostile Darmstadt, Germany-based Merck was well on its way to buying up 30% of the target's shares, which, under German takeover law, would have required it to make an offer for the entire company. The triangular relationship of the German drugmakers has seen months of activity.

• Schering rebuffed a €77 euros per share takeover attempt by Merck in March, which the would-be acquirer later withdrew, saying any higher offer would be "unreasonable."
  • Apparently, Merck no longer clings to that argument. One analyst told The Deal whatever price its paying for Schering shares is likely higher than the €86 per share buyout offer from Bayer.
  • Its latest, but failed strategy surfaced Thursday, June 8, when the company said it had amassed a 10.1% Schering stake. The next day, Merck said it had upped the holding to 18.6%, or 35.4 billion shares worth €3.04 billion.
• Meanwhile, Bayer held more than 61% of Schering as of Friday, June 9, and voiced frustration in a press release. The would-be acquirer said it would counter Merck's encroach and buy shares itself. Seventy-five percent of the target's shares were required for its bid to succeed.
• Before the frenzied week, it had looked like Bayer had won its target as Merck withdrew its initial offer March 24.
  • The offer energized Schering stock, which climbed more than 5.2% to €89.45 at the time.
  • Bayer's offer expired at midnight Wednesday, June 14 and the acquirer won most of its target. Maybe now we'll all get a little pain relief after a deal to create a German drug juggernaut has finally come together.