DOW JONES NEWSWIRES
Merck & Co. (MRK) said it has arranged for $7 billion in new
credit facilities with the help of JPMorgan Chase & Co. (JPM)
as it lines up capital to complete its $41.1 billion purchase of
rival pharmaceutical Schering-Plough Corp. (SGP).
JPMorgan, acting as the lead, has helped the drug company sign
up other worldwide banking giants at a time when lending has been
characterized as practically nonexistent. Merck also said that it
had amended its current $1.5 billion revolving facility to remain
in place following the merger.
The list of banks includes Bank of America Corp. (BAC), BNP
Paribas SA (BNPQY), Citigroup Inc. (C), Credit Suisse Group (CS),
HSBC Holdings Plc. (HBC), Royal Bank of Scotland Plc (RBS),
Santander Bancorp (SBP) and UBS AG (UBS).
Earlier this month, Merck said the loan financing would be split
between a $3 billion, 364-day bridge-loan facility, a $3 billion
asset-sale facility structured as a 364-day revolver and a $1
billion commercial paper backstop, according to a Securities and
Exchange Commission filing.
It is making the acquisition in an attempt to diversify, along
with other pharmaceuticals, as the industry consolidates to cope
with recessions and a lack of new blockbuster drugs in the
pipeline.
Meanwhile, Merck said in a separate release that it has received
a letter from the Massachusetts U.S. Attorney confirming it was the
target of a previously disclosed federal grand jury investigation
on its controversial pain treatment Vioxx.
Merck withdrew Vioxx from the market in 2004 after it was linked
to increased risk of heart attacks and strokes and tens of
thousands of Vioxx users sued. Merck settled the litigation for
$4.85 billion.
Shares of Merck were down less than 1% in late trading, moving
at $27.75.
-By David Benoit, Dow Jones Newswires; 201-938-2472;
david.benoit@dowjones.com