SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
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by the Registrant x
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Preliminary
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Confidential,
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Definitive
Proxy Statement
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Definitive
Additional Materials
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x
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Soliciting
Material Pursuant to §240.14a-12
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Merck
& Co., Inc.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Fee
computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
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(1)
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Form,
Schedule or Registration Statement No.:
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Party:
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(4)
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Date
Filed:
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This
filing consists of (1) a Letter from Merck & Co., Inc. (“Merck”) Chairman,
President and Chief Executive Officer Richard T. Clark to Merck employees, dated
March 9, 2009, (2) Merck and Schering-Plough to Combine Fact Sheet, (3) Merck
& Schering-Plough Transaction Talking Points For Merck Managers, (4) Merck
Employee FAQs, and (5) an email to all US Field Employees of Merck from Adam
Schechter and Margie McGlynn, dated March 9, 2009, each in connection with
the proposed transaction between Merck and Schering-Plough
Corporation.
March 9,
2009
Dear
Colleagues,
Today we
announced our decision to merge with our long-term partner, Schering-Plough, in
a transaction valued at $41.1 billion. The combined company will be
called Merck. This is one of the most significant and exciting
milestones for both of our companies.
Many of
you have heard me speak about the need to look for opportunities to grow our
business, execute on the Plan
to Win and build a flexible, agile organization that can respond
to – and take
advantage of – changes in
the healthcare industry. Today, we are significantly closer to that
goal. We have announced what I believe is an ideal combination that
gives us key advantages across our business and puts us in a better position to
fund innovation and drive growth for the future.
This
combination has many benefits.
For
Our People
Like
Merck, Schering-Plough is comprised of some of the most talented and dedicated
people in the industry. The new organization will give us an
opportunity to execute our strategy and mission on a larger scale and to take
advantage of the key capabilities and talent that Schering-Plough brings to the
table. Merging the two companies will create a stronger, more
financially sound organization that can deliver consistent, sustainable
growth. We expect this broader portfolio of products will fuel the
growth of the combined company beyond the expirations of Merck’s current
patents.
Schering-Plough
generates about 70 percent of its revenue outside the U.S., including more than
$2 billion in annual revenue from emerging markets. This combination
will dramatically accelerate our international growth efforts, including Merck’s
goal of reaching top five market share in targeted emerging
markets. The combined company will have an industry-leading global
team of marketing and sales professionals. In addition, with a more
geographically diverse mix of business, the combined company is expected to
generate more than 50 percent of our revenue outside the U.S.
For
Patients
By
harnessing the strengths of both companies, the combined entity will be
well-positioned to further deliver on our shared goal of discovering new
therapies for patients to help them live healthier, happier
lives. Together, Merck and Schering-Plough will have a portfolio of
products including cardiovascular, respiratory, oncology, neuroscience,
infectious disease, immunology and women’s health. The progress Merck
and Schering-Plough have made in implementing new customer-centric selling
models will increase the ability of the combined company's sales force to help
physicians and healthcare systems improve patient outcomes.
For
Science
Our
respective companies each have a rich history in breakthrough
science. Together, we will build on this legacy. The
combined company will have a product pipeline with greater depth and scope, and
numerous promising drug candidates.
Our
complementary efforts will expand our already strong franchises. In
addition, our pipeline will benefit from Schering-Plough’s research efforts in
important therapeutic areas, such as oncology. The
merger will add high potential early-, mid- and late-stage pipeline candidates,
providing a platform for sustainable growth. Importantly, the
transaction will double the number of potential medicines and vaccines Merck has
in Phase III development, bringing the total to 18. And with greater
financial resources available to us through synergies, we will have the
financial flexibility to invest in these candidates as well as in external
R&D opportunities and to build on the strong legacies of both
companies.
For
Shareholders
In
addition to the benefits already noted, we are funding our future. We
will begin reaping financial benefits in year one, while maintaining our
dividend and freeing up cash to pursue the right licensing and research
opportunities for future growth. In fact, we expect to achieve cost
savings of approximately $3.5 billion beyond 2011 – savings we can use to
augment our already notable financial strength and to invest in strategic
opportunities.
I look
forward to joining together with an outstanding partner that we know well and
that shares our commitment to patients, employees and the communities where we
work and live. Merck’s integration team
will be led by Adam Schechter, president of Global Pharmaceuticals, who will
report to me. Adam has deep knowledge of both companies from his time
leading the cholesterol joint venture in the United States during the launch of
VYTORIN (ezetimibe/simvastatin). Schering-Plough’s integration team
will be led by Brent Saunders, senior vice president and president, Consumer
Health Care, who will report to Fred Hassan, chairman and chief executive
officer of Schering-Plough.
We
recognize that integrating companies of our size will be a significant
undertaking, but we will strive to make it as seamless as possible. A
key priority is keeping the best talent from both
companies. Recognizing that the combination will result in a much
larger organization, we expect that the substantial majority of Schering-Plough
employees will remain with the combined company. In addition, both
Merck and Schering-Plough will institute hiring freezes
immediately.
We are
committed to keeping you informed throughout this process and, at the end of
this letter, you will find important links to additional information, including
today’s press release, a video message and a joint website designed specifically
for the Merck and Schering-Plough combination.
In
closing, we are confident that, together, Merck and Schering-Plough will make a
meaningful difference in the future of global healthcare.
Sincerely,
Richard T. Clark
Chairman,
President and Chief Executive Officer
# # #
Forward-Looking
Statements
This
communication contains “forward-looking statements” as that term is defined in
the Private Securities Litigation Reform Act of 1995. These statements are based
on both Merck’s and Schering-Plough’s managements current expectations and
involve risks and uncertainties, which may cause results to differ materially
from those set forth in the statements. The forward-looking
statements may include statements regarding product development, product
potential or financial performance. No forward-looking statement can be
guaranteed, and actual results may differ materially from those projected. Merck
and Schering-Plough undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Forward-looking statements in this communication should be
evaluated together with the many uncertainties that affect either companies’
business, particularly those mentioned in the risk factors and cautionary
statements set forth in Item 1A of either companies’ 10-K for the year ended
December 31, 2008, and in their periodic reports on Form 10-Q and Form 8-K,
which the companies incorporate by reference.
These
reports are available at www.merck.com and
www.schering-plough.com.
Additional
Information
In
connection with the proposed transaction, Schering-Plough will file a
registration statement, including a joint proxy statement of Merck and
Schering-Plough, with the Securities and Exchange Commission (the
“SEC”). Investors are urged to read the registration statement and
joint proxy statement (including all amendments and supplements to it) because
they will contain important information. Investors may obtain free
copies of the registration statement and joint proxy statement when they become
available, as well as other filings containing information about Merck and
Schering-Plough, without charge, at the SEC’s Internet site (www.sec.gov). These
documents may also be obtained for free from Schering-Plough’s Investor
Relations web site (www.schering-plough.com)
or by directing a request to Schering-Plough Investor Relations at (908)
298-7436. Copies of Merck’s filings may be obtained for free from Merck’s
Investor Relations Web Site (www.merck.com) or by
directing a request to Merck’s Office of the Secretary at (908)
423-1000.
Merck and
Schering-Plough and their respective directors and executive officers and other
members of management and employees are potential participants in the
solicitation of proxies from Merck and Schering-Plough shareholders in respect
of the proposed transaction.
Information
regarding Schering-Plough’s directors and executive officers is available in
Schering-Plough’s proxy statement for its 2008 annual meeting of shareholders,
filed with the SEC on April 23, 2008, and information regarding Merck’s
directors and executive officers is available in Merck’s preliminary proxy
statement for its 2009 annual meeting of stockholders, filed with the SEC
February 25, 2009. Additional information regarding the interests of
such potential participants in the proposed transaction will be included in the
registration and joint proxy statement filed with the SEC in connection with the
proposed transaction.
# # #
MERCK
AND SCHERING-PLOUGH TO COMBINE
Combined
Company Positioned for Sustainable Growth Through Scientific
Innovation
and
a Stronger, More Diversified Product Portfolio
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Companies
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Ticker
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NYSE:
MRK
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NYSE:
SGP
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Description
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Merck
& Co., Inc. is a global research-driven pharmaceutical company
dedicated to putting patients first. Established in 1891, Merck discovers,
develops, manufactures and markets vaccines and medicines to address unmet
medical needs. The Company devotes extensive efforts to increase access to
medicines through far-reaching programs that not only donate Merck
medicines but help deliver them to the people who need them. Merck also
publishes unbiased health information as a not-for-profit
service.
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Schering-Plough
is an innovation-driven, science-centered global health care company.
Through its own biopharmaceutical research and collaborations with
partners, Schering-Plough creates therapies that help save and improve
lives around the world. The company applies its research-and-development
platform to human prescription, animal health and consumer health care
products. Schering-Plough's vision is to Earn Trust, Every Day
with the doctors, patients, customers and other stakeholders served by its
colleagues around the world.
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Website
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www.merck.com
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www.schering-plough.com
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Employees
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55,200
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51,000
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2008
Revenues
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$23.9
billion
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$18.5
billion
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2008
Revenue by Geographic Region
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United
States - $13,371 million
Europe,
Middle East and Africa - $5,774 million
Japan
- $1,824 million
Other
- $2,883 million
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United
States - $5,556 million
Europe
and Canada - $8,903 million
Latin
America - $1,987 million
Asia
Pacific - $2,056 million
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2008
R&D Investment
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$4.8
billion
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$3.5
billion
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Headquarters
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Whitehouse
Station, New Jersey
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Kenilworth,
New Jersey
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Cash
and investments (as of 12/31/08)
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$12
billion
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$3.5
billion
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Major
pharmaceutical and vaccine products
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Singulair (montelukast
sodium)
Zetia (ezetimibe) and
Vytorin (ezetimibe/simvastatin)
Cozaar (losartan
potassium) and Hyzaar (losartan
potassium and hydrochlorothiazide)
Gardasil (human
papillomavirus (HPV) quadrivalent (types 6, 11, 16, 18) vaccine,
recombinant)
Januvia (sitagliptin)
and Janumet (sitagliptin/metformin
hydrochloride)
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Zetia (ezetimibe) and
Vytorin (ezetimibe/simvastatin)
Remicade
(infliximab)
Nasonex (mometasone
furoate monohydrate)
Temodar
(temozolomide)
PEG-Intron
(peginterferon alfa-2b)
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Novel
products in late stage development
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CV: MK-0859
(anacetrapib), MK-7418 (rolofylline), MK-524 A and B (extended-release
niacin/laropiprant and extended-release
niacin/laropiprant/simvastatin)
Oncology: MK-8669
(deforolimus)
Neuroscience: MK-0974
(telcagepant)
Women's
Health: MK-0822 (odanacatib) and V-503
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CV: SCH-530348
(thrombin receptor antagonist) and acadesine
Immunology: Simponi
(golimumab)
Infectious Diseases:
vicriviroc and boceprevir
Women's Health:
corifollitropin alfa, esmirtazapine and NOMAC/E2
Neuroscience: Saphris
(asenapine), Bridion (sugammadex)
Respiratory:
mometasone/formoterol, grass pollen immunotherapy
tablet
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Business
segments
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Prescription
Vaccine
Animal
Health joint venture (Merial)
Consumer
Health joint venture (J&J-Merck)
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Prescription
Animal
Health
Consumer
Health (OTC)
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Executive
Management Teams
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Richard
T. Clark, chairman, president and chief executive officer
Willie
A. Deese, executive vice president and president, Merck Manufacturing
Division
Kenneth
C. Frazier, executive vice president and president, Global Human
Health
Mirian
Graddick-Weir, executive vice president, Human Resources
Peter
N. Kellogg, executive vice president and chief financial
officer
Peter
S. Kim, Ph.D., executive vice president and president, Merck Research
Laboratories
Bruce
N. Kuhlik, executive vice president and general counsel
J.
Chris Scalet, executive vice president, Global Services, and chief
information officer
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Fred
Hassan, chairman and chief executive officer
Robert
J. Bertolini, executive vice president and chief financial
officer
Richard
S. Bowles III, senior vice president, Global Quality
Operations
C.
Ron Cheeley, senior vice president, Global Human Resources
Carrie
S. Cox, executive vice president and president, Global
Pharmaceuticals
Thomas
P. Koestler, executive vice president and president, Schering-Plough
Research Institute
Raul
E. Kohan, senior vice president and president, Global Animal
Health
Ian
McInnes, senior vice president and president, Global Supply
Chain
Lori
Queisser, senior vice president, Global Compliance and Business
Practices
Thomas
J. Sabatino, Jr., executive vice president and general
counsel
Brent
Saunders, senior vice president and president, Consumer Health
Care
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# # #
Forward-Looking
Statements
This
communication contains “forward-looking statements” as that term is defined in
the Private Securities Litigation Reform Act of 1995. These statements are based
on both Merck’s and Schering-Plough’s managements current expectations and
involve risks and uncertainties, which may cause results to differ materially
from those set forth in the statements. The forward-looking
statements may include statements regarding product development, product
potential or financial performance. No forward-looking statement can be
guaranteed, and actual results may differ materially from those projected. Merck
and Schering-Plough undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Forward-looking statements in this communication should be
evaluated together with the many uncertainties that affect either companies’
business, particularly those mentioned in the risk factors and cautionary
statements set forth in Item 1A of either companies’ 10-K for the year ended
December 31, 2008, and in their periodic reports on Form 10-Q and Form 8-K,
which the companies incorporate by reference.
These
reports are available at www.merck.com and
www.schering-plough.com.
Additional
Information
In
connection with the proposed transaction, Schering-Plough will file a
registration statement, including a joint proxy statement of Merck and
Schering-Plough, with the Securities and Exchange Commission (the
“SEC”). Investors are urged to read the registration statement and
joint proxy statement (including all amendments and supplements to it) because
they will contain important information. Investors may obtain free
copies of the registration statement and joint proxy statement when they become
available, as well as other filings containing information about Merck and
Schering-Plough, without charge, at the SEC’s Internet site (www.sec.gov). These
documents may also be obtained for free from Schering-Plough’s Investor
Relations web site (www.schering-plough.com)
or by directing a request to Schering-Plough Investor Relations at (908)
298-7436. Copies of Merck’s filings may be obtained for free from Merck’s
Investor Relations Web Site (www.merck.com) or by
directing a request to Merck’s Office of the Secretary at (908)
423-1000.
Merck and
Schering-Plough and their respective directors and executive officers and other
members of management and employees are potential participants in the
solicitation of proxies from Merck and Schering-Plough shareholders in respect
of the proposed transaction.
Information
regarding Schering-Plough’s directors and executive officers is available in
Schering-Plough’s proxy statement for its 2008 annual meeting of shareholders,
filed with the SEC on April 23, 2008, and information regarding Merck’s
directors and executive officers is available in Merck’s preliminary proxy
statement for its 2009 annual meeting of stockholders, filed with the SEC
February 25, 2009. Additional information regarding the interests of
such potential participants in the proposed transaction will be included in the
registration and joint proxy statement filed with the SEC in connection with the
proposed transaction.
# # #
Merck & Schering-Plough
Transaction Talking Points
For Merck
Managers
Announcement
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●
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Merck
and Schering-Plough announced that our companies will combine in a stock
and cash transaction, valued at $41.1 billion, creating a strong, global
healthcare leader.
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●
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We
believe this transaction will uniquely position the combined company to
continue to grow by discovering, developing and delivering innovative
treatments for patients around the world.
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Customers
will benefit from a formidable research and development pipeline, a
significantly broader portfolio of medicines and our expanded presence in
key international markets.
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I’m
sure you’re familiar with Schering-Plough, an innovation-driven,
science-centered global healthcare company operating in human
prescription, animal health and consumer health care product
segments. A long-time leader in the industry, Schering-Plough
creates therapies that help save and improve lives around the world
through its own biopharmaceutical research and collaborations with
partners.
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Complementary
Product Portfolios and Pipelines Focused on Key Therapeutic Areas
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●
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Part
of what makes this transaction so exciting is the complementary nature of
our products and our pipelines.
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Merck
and Schering-Plough have targeted the same therapeutic areas, including
cardiovascular, respiratory, oncology, neuroscience, infectious disease,
immunology and women’s health. This transaction allows us to
leverage our combined capabilities and expertise in these
areas.
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●
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The
transaction will double the number of potential medicines Merck has in
Phase III development, bringing the total to
18.
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Robust
R&D to Deliver Innovative Medicines for Patients
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●
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Merck
and Schering-Plough both have proven track records of breakthrough
research and scientific discovery. With our combined R&D
expertise and scientific leadership, we can continue to be at the
forefront of drug discovery and
development.
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●
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In
addition, we will achieve substantial cost savings through this
transaction, which will provide us with the financial flexibility to
invest in promising drug candidates as well as external R&D
opportunities.
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Expanded
Global Presence
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●
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This
combination will achieve another Merck goal – expanding our global
presence, particularly in high-growth emerging markets.
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●
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The
combined company will have an industry-leading global team of marketing
and sales professionals and a more geographically diverse mix of
business. In addition, the combined company is expected to
generate more than 50% of its revenue outside the
U.S.
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Financial
Strength
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●
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The
combined company will have a strong balance sheet with robust free
cash-flow.
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●
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By
optimizing its investments, the combined company will maximize the
benefits of strategic growth initiatives and R&D efforts to solidify
its position at the forefront of
innovation.
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●
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For
all of these reasons– people, pipeline, product portfolio, global
competitiveness, cost structure, financial strength – we believe that this
is a truly unique and compelling
combination.
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Timing
to Close / Approvals
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●
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The
transaction is subject to approval by both companies’ shareholders as well
as customary approvals.
|
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●
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We
anticipate that it will close in the fourth quarter of this
year.
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Integration
Process
|
●
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Merck's
integration team will be led by Adam Schechter, president of Global
Pharmaceuticals, who will report to Dick Clark. Schering-Plough's
integration team will be led by Brent Saunders, senior vice president and
president, Consumer Health Care, who will report to Fred
Hassan.
|
Conclusion
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●
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We
are confident that, together, Merck and Schering-Plough will make a
meaningful difference in the future of global
healthcare.
|
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●
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I
hope that you share my enthusiasm. If you have any further
questions, please don’t hesitate to contact
me.
|
# # #
Forward-Looking
Statements
This
communication contains “forward-looking statements” as that term is defined in
the Private Securities Litigation Reform Act of 1995. These statements are based
on both Merck’s and Schering-Plough’s managements current expectations and
involve risks and uncertainties, which may cause results to differ materially
from those set forth in the statements. The forward-looking
statements may include statements regarding product development, product
potential or financial performance. No forward-looking statement can be
guaranteed, and actual results may differ materially from those projected. Merck
and Schering-Plough undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Forward-looking statements in this communication should be
evaluated together with the many uncertainties that affect either companies’
business, particularly those mentioned in the risk factors and cautionary
statements set forth in Item 1A of either companies’ 10-K for the year ended
December 31, 2008, and in their periodic reports on Form 10-Q and Form 8-K,
which the companies incorporate by reference.
These
reports are available at www.merck.com and
www.schering-plough.com.
Additional
Information
In
connection with the proposed transaction, Schering-Plough will file a
registration statement, including a joint proxy statement of Merck and
Schering-Plough, with the Securities and Exchange Commission (the
“SEC”). Investors are urged to read the registration statement and
joint proxy statement (including all amendments and supplements to it) because
they will contain important information. Investors may obtain free
copies of the registration statement and joint proxy statement when they become
available, as well as other filings containing information about Merck and
Schering-Plough, without charge, at the SEC’s Internet site (www.sec.gov). These
documents may also be obtained for free from Schering-Plough’s Investor
Relations web site (www.schering-plough.com)
or by directing a request to Schering-Plough Investor Relations at (908)
298-7436. Copies of Merck’s filings may be obtained for free from Merck’s
Investor Relations Web Site (www.merck.com) or by
directing a request to Merck’s Office of the Secretary at (908)
423-1000.
Merck and
Schering-Plough and their respective directors and executive officers and other
members of management and employees are potential participants in the
solicitation of proxies from Merck and Schering-Plough shareholders in respect
of the proposed transaction.
Information
regarding Schering-Plough’s directors and executive officers is available in
Schering-Plough’s proxy statement for its 2008 annual meeting of shareholders,
filed with the SEC on April 23, 2008, and information regarding Merck’s
directors and executive officers is available in Merck’s preliminary proxy
statement for its 2009 annual meeting of stockholders, filed with the SEC
February 25, 2009. Additional information regarding the interests of
such potential participants in the proposed transaction will be included in the
registration and joint proxy statement filed with the SEC in connection with the
proposed transaction.
# # #
Merck
Employee FAQ
|
1.
|
What
was announced today?
|
Merck
& Co., Inc. and Schering-Plough Corporation today announced that their
Boards of Directors have unanimously approved a definitive merger agreement
under which the companies will combine, under the name Merck, in a stock and
cash transaction valued at $41.1 billion.
|
2.
|
Why
are Merck and Schering-Plough
combining?
|
We are
creating a strong, global healthcare leader built for sustainable growth and
success. The combined company will benefit from a formidable research
and development pipeline, a significantly broader portfolio of medicines and
vaccines and an expanded presence in key international markets, particularly in
high-growth emerging markets. The broader portfolio of medicines
spans important therapeutic areas including, cardiovascular, respiratory,
oncology, neuroscience, infectious disease, immunology and women’s
health. In addition, Schering-Plough’s biologics expertise will
accelerate Merck’s efforts in building biologics capabilities.
The
combination will enable Merck to maintain its strong financial profile while
positioning it to deliver superior financial performance and create meaningful
value for shareholders.
|
3.
|
Why
does Merck believe that Schering-Plough is the best
partner?
|
Schering-Plough
is an innovation-driven, science-centered global healthcare
company. Through its own biopharmaceutical research and
collaborations with partners, Schering-Plough creates therapies that help save
and improve lives around the world. Over the last six years
Schering-Plough has transformed into a strong competitor in the global
pharmaceutical industry and in 2007, successfully completed its acquisition of
Organon BioSciences, with its leading human and animal health
business. Through their talent and dedication, Schering-Plough
employees have built a strong, diverse business with a robust R&D engine and
late stage pipeline that is complementary to our own.
We look
forward to joining together with an outstanding partner we know well and that
shares our commitment to improving the health and well-being of people
throughout the world. The Schering-Plough and Merck pipelines are
remarkably complementary and will greatly increase our ability to deliver
important new medicines to patients. With our combined R&D expertise and
scientific leadership, we can continue to be at the forefront of drug discovery
and development.
|
4.
|
What
are the terms of the transaction?
|
Under the
terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares
of Merck and $10.50 in cash for each share of Schering-Plough. Based
on the closing price of Merck stock on March 6, 2009, the consideration is equal
to $23.61 per share, or $41.1 billion in the aggregate. This price represents a
premium to Schering-Plough shareholders of approximately 34 percent based on the
closing price of Schering-Plough stock on March 6, 2009. The
consideration also represents a premium of approximately 44 percent based on the
average closing price of the two stocks over the last 30 trading
days.
|
5.
|
How
long before the transaction is
completed?
|
We intend
to move forward expeditiously so that we can begin to capture the benefits of
this transaction quickly. We expect to receive all necessary
regulatory approvals and to complete the transaction in the fourth quarter of
2009.
|
6.
|
What
are the integration plans? What can we expect in the interim
period?
|
Following
the close of the transaction, the Board of Directors of the combined company
will be comprised of the current Merck Board and three representatives from
Schering-Plough’s Board. Richard T. Clark will serve as chairman,
president and chief executive officer of the combined company. Fred
Hassan is committed to continuing the strong operations at Schering-Plough and
intends to participate in the integration planning until the close.
Merck’s
integration team will be led by Adam Schechter, president of Global
Pharmaceuticals, who will report to Mr. Clark. Schering-Plough’s
integration team will be led by Brent Saunders, senior vice president and
president, Consumer Health Care, who will report to Mr. Hassan. A key
priority is keeping the best talent from both companies. Recognizing
that the combination will result in a much larger organization, Merck expects
that the substantial majority of Schering-Plough employees will remain with the
combined company. In addition, both Merck and Schering-Plough will
institute hiring freezes immediately.
Both
Merck and Schering-Plough will continue to operate as independent companies
until the transaction closes, and we expect that between now and then the
day-to-day operations of each company will continue normally. As
always, we appreciate your efforts and will rely on you to stay focused on your
jobs and to continue serving the patients and customers who depend on
Merck.
|
7.
|
How
will this transaction benefit
employees?
|
For
employees of the combined company, we believe this transaction represents an
exciting opportunity. We will be a larger healthcare leader with a
formidable research and development pipeline, a significantly broader portfolio
of medicines and an expanded presence in key international markets, particularly
in high-growth emerging markets. As a result, our people will have
the opportunity to execute our strategy and mission on a larger scale than
before, and take advantage of key capabilities and talent that this combination
will bring.
In
addition, we will be able to maintain a strong financial profile while
positioning the company to deliver superior financial performance and create
meaningful value for shareholders, customers and employees.
|
8.
|
How
will staffing at various levels throughout the combined company be
determined? Will any of our facilities be
impacted? Will there be any
layoffs?
|
While we
expect the substantial majority of Schering-Plough employees to remain with the
combined company, in any combination of two companies in the same industry,
there will be some overlap and therefore job reductions. We are
committed to treating all employees with respect and dignity. We will
communicate new information when it becomes available and will provide answers
to questions as soon as decisions are made.
Our goal
is to ensure we keep the best talent, recognizing that we will be a much larger
organization with strengthened capabilities. We will integrate
Schering-Plough’s talent into Merck across each division and
function. For Merck employees, we will not undertake a complete
top-down review of our people, but we will find ways to strategically retain and
deploy Schering-Plough's top talent to help us drive our combined
business.
In
addition, effective immediately, Merck and Schering-Plough will implement
respective hiring freezes except for absolutely “critical” jobs. The
one exception to the hiring freeze relates to Merck's BRGOS initiative where
there is a critical need to fill jobs now. Even in this case, we will
strive to keep vacancies open until the close of our transaction with
Schering-Plough so that we can offer these opportunities to Schering-Plough
employees wherever possible. We will proactively find ways to take
advantage of Schering-Plough’s key talent to fill current Merck vacancies at
closing.
|
9.
|
What
will happen to Merck’s 2008 restructuring
program?
|
We will
continue the implementation of Merck’s 2008 restructuring
program. Merck and Schering-Plough have previously committed to
productivity increases, efficiency improvements and cost savings, including job
reductions, through their respective restructuring plans. Therefore,
savings announced as part of the merger are in addition to those previously
announced restructuring plans.
|
10.
|
What
is the impact on jobs in my market, plant or research
site?
|
At this
time, it’s premature to discuss any specific plans. A key priority is
keeping the best talent from both companies, recognizing that Merck will be a
much larger organization.
|
11.
|
What
can you tell me about decisions to close plants or R&D sites,
especially given plans currently under
way?
|
At this
time, it’s premature to discuss any specific plans. Merck’s
integration team will be led by Adam Schechter, president of Global
Pharmaceuticals, who will report to Mr. Clark. Schering-Plough’s
integration team will be led by Brent Saunders, senior vice president and
president, Consumer Health Care, who will report to Fred Hassan, chairman and
chief executive officer of Schering-Plough. A key priority is keeping
the best talent from both companies, recognizing that Merck will be a much
larger organization
|
12.
|
How
does this transaction benefit patients and healthcare
providers?
|
This
combination will create a stronger global company that advances our ability to
provide lifesaving therapies for patients. By harnessing the
strengths of both companies, the combined entity will be well-positioned to
further deliver on our shared goal of discovering new therapies for patients to
help them live healthier, happier lives.
|
13.
|
How
does the transaction affect our
partners?
|
In the
short-term, nothing will change in terms of their interactions with
Merck. As we move closer to the execution of the agreement later this
year, we will strive to minimize any disruption to our interactions with our
partners. We are reaching out to our partners to let them know about today's
announcement and how we believe it strengthens Merck's position as a leader in
healthcare.
|
14.
|
I am a Merck
representative. What should I do differently in my interactions
with JV or Schering-Plough representatives?
|
Nothing. Until
the merger is executed, Merck, Schering-Plough and JV staff should continue to
perform their jobs the same way as they did before the
announcement. It’s important that you do not start to share
information or plan activities as if the merger has been completed until the
merger has actually been completed.
|
15.
|
Who
will lead the combined company?
|
Following
the close of the transaction, the Board of Directors of the combined company
will be comprised of the current Merck Board and three representatives from
Schering-Plough. Richard Clark will serve as chairman, president and
chief executive officer of the combined company. Fred Hassan,
chairman and chief executive officer of Schering-Plough, is committed to
continuing the strong operations at Schering-Plough and intends to participate
in the integration planning until the close.
|
16.
|
What
approvals are required?
|
The
transaction is subject to approval by Merck and Schering-Plough shareholders and
the satisfaction of customary closing conditions and regulatory approvals,
including expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and clearance
by the European Commission under the EC Merger Regulation and certain other
foreign jurisdictions.
|
17.
|
What
can I tell my friends, family and neighbors about the
transaction?
|
We are
creating a strong, global healthcare leader built for sustainable growth and
success. The benefits gained through this transaction will enable the
combined company to continue to discover, develop and deliver innovative new
treatments for patients. In addition, we will be able to maintain a
strong financial profile while positioning the company to deliver superior
financial performance and create meaningful value for shareholders.
|
18.
|
What
should I say if I’m contacted by media, financial community, or other
third parties about the
transaction?
|
As
always, should you be contacted by members of the media or financial community
or other third parties regarding this transaction, please refer all inquiries
directly to the Merck Media Relations line at 908-423-6022.
|
19.
|
If
I have additional questions, who can I
ask?
|
We
encourage you to speak with your manager or any member of the management
team. We will do our best to share information as it becomes
available.
# # #
Forward-Looking
Statements
This
communication contains “forward-looking statements” as that term is defined in
the Private Securities Litigation Reform Act of 1995. These statements are based
on both Merck’s and Schering-Plough’s managements current expectations and
involve risks and uncertainties, which may cause results to differ materially
from those set forth in the statements. The forward-looking
statements may include statements regarding product development, product
potential or financial performance. No forward-looking statement can be
guaranteed, and actual results may differ materially from those projected. Merck
and Schering-Plough undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future events
or otherwise. Forward-looking statements in this communication should be
evaluated together with the many uncertainties that affect either companies’
business, particularly those mentioned in the risk factors and cautionary
statements set forth in Item 1A of either companies’ 10-K for the year ended
December 31, 2008, and in their periodic reports on Form 10-Q and Form 8-K,
which the companies incorporate by reference.
These
reports are available at www.merck.com and
www.schering-plough.com.
Additional
Information
In
connection with the proposed transaction, Schering-Plough will file a
registration statement, including a joint proxy statement of Merck and
Schering-Plough, with the Securities and Exchange Commission (the
“SEC”). Investors are urged to read the registration statement and
joint proxy statement (including all amendments and supplements to it) because
they will contain important information. Investors may obtain free
copies of the registration statement and joint proxy statement when they become
available, as well as other filings containing information about Merck and
Schering-Plough, without charge, at the SEC’s Internet site (www.sec.gov). These
documents may also be obtained for free from Schering-Plough’s Investor
Relations web site (www.schering-plough.com)
or by directing a request to Schering-Plough Investor Relations at (908)
298-7436. Copies of Merck’s filings may be obtained for free from Merck’s
Investor Relations Web Site (www.merck.com) or by
directing a request to Merck’s Office of the Secretary at (908)
423-1000.
Merck and
Schering-Plough and their respective directors and executive officers and other
members of management and employees are potential participants in the
solicitation of proxies from Merck and Schering-Plough shareholders in respect
of the proposed transaction.
Information
regarding Schering-Plough’s directors and executive officers is available in
Schering-Plough’s proxy statement for its 2008 annual meeting of shareholders,
filed with the SEC on April 23, 2008, and information regarding Merck’s
directors and executive officers is available in Merck’s preliminary proxy
statement for its 2009 annual meeting of stockholders, filed with the SEC
February 25, 2009. Additional information regarding the interests of
such potential participants in the proposed transaction will be included in the
registration and joint proxy statement filed with the SEC in connection with the
proposed transaction.
# # #
Email
To Merck Employees
To
: All US Field
Employees
From
: Adam
Schechter/Margie
McGlynn
Re
: Combination of
Merck and Schering-Plough
Date
: March 9,
2009
As you
know, this morning we announced that the Boards of Directors of Merck and
Schering-Plough unanimously approved a definitive merger agreement under which
Merck and Schering-Plough will combine, under the name Merck, and to be led by
Dick Clark. This strategic combination creates a strong, global healthcare
leader built for sustainable growth and success.
The link
to the news release that you received earlier was being provided to you for your
background information only. You are not to provide copies of the
news release or any other document related to the merger to your
customers.
The
purpose of this bulletin is to provide specific direction related to customer
interactions and interactions with other representatives.
We
believe that once the companies are combined, the resulting broader, more
diverse product portfolio will increase Merck's ability to help our customers
improve patient outcomes and make a meaningful difference in the future of
healthcare.
Adam
Schechter, president, Global Pharmaceuticals, is leading the transition effort.
The progress we have already made in implementing our new commercial model
across Merck will help ensure the smooth and efficient integration of the two
commercial operations.
We will
continue to keep you informed as the transition progresses. For additional
information on the transaction, you may refer to our joint web site, www.ANewMerck.com.
Again, this is for your background information only; it is not for use in
discussions with customers.
Direction
Regarding Interaction with Schering-Plough or JV
Until the
merger is executed, Merck, SGP and JV staff should continue to perform their
jobs the same way that they did before the announcement. It is important that
you do not start to
share information or plan activities as if the merger has been completed until
the merger has actually been completed and you have received specific direction
regarding what to do.
Direction
Regarding Communications with Customers
In your
interactions with customers, do not proactively discuss the merger
agreement.
If
asked about the merger:
"On March
9, Merck and Schering-Plough announced that the two companies had entered into
an agreement to merge the two companies. Merck's leadership team believes
that the combined company will be positioned for sustainable growth through
scientific innovation and a stronger, more diversified product portfolio.
Information about the merger is available at the two companies' websites and
www.anewmerck.com.
Merck and Schering-Plough expect to complete the transaction in the fourth
quarter of this year."
Forward
Looking Statement
This
communication contains “forward-looking statements” as that term is defined in
the Private Securities Litigation Reform Act of 1995. These statements are based
on management's current expectations and involve risks and uncertainties, which
may cause results to differ materially from those set forth in the
statements. The forward-looking statements may include statements
regarding product development, product potential or financial performance. No
forward-looking statement can be guaranteed, and actual results may differ
materially from those projected. Merck undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information,
future events or otherwise. Forward-looking statements in this communication
should be evaluated together with the many uncertainties that affect Merck’s
business, particularly those mentioned in the risk factors and cautionary
statements set forth in Item 1A of Merck’s Form 10-K for the year ended December
31, 2008, and in its periodic reports on Form 10-Q and Form 8-K, which the
Company incorporates by reference. These reports are available at www.merck.com and
www.schering-plough.com.
Additional
Information
In
connection with the proposed transaction, Schering-Plough will file a
registration statement, including a joint proxy statement of Merck and
Schering-Plough, with the Securities and Exchange Commission (the “SEC”).
Investors are urged to read the registration and joint proxy statement
(including all amendments and supplements to it) because it will contain
important information. Investors may obtain free copies of the
registration and joint proxy statement when it becomes available, as well
as other filings containing information about Merck and Schering-Plough, without
charge, at the SEC’s Internet site (www.sec.gov). These documents may also be
obtained for free from Schering-Plough’s Investor Relations Web Site
(www.schering-plough.com) or by directing a request to Schering-Plough at
Investor Relations (908) 298-7436. Copies of Merck’s filings may be obtained for
free from Merck’s Investor Relations Web Site (www.merck.com) or by directing a
request to Merck's Office of the Secretary (908) 423-1000.
Merck and
Schering-Plough and their respective directors and executive officers and other
members of management and employees are potential participants in the
solicitation of proxies from Merck and Schering-Plough shareholders in respect
of the proposed transaction.
Information
regarding Schering-Plough’s directors and executive officers is available in
Schering-Plough’s proxy statement for its 2008 annual meeting of shareholders,
filed with the SEC on April 23, 2008 and information regarding Merck’s directors
and executive officers is available in Merck’s preliminary proxy statement for
its 2009 annual meeting of stockholders, filed with the SEC on February 25,
2009. Additional information regarding the interests of such potential
participants in the proposed transaction, which may be different than those of
Schering-Plough’s or Merck’s Shareholders, will be included in the registration
and proxy statement filed with the SEC in connection with the proposed
transaction when it becomes available.