Monthly M&A Insider - Mergermarket

Deal of the month
RATIONALE & SYNERGIES
• By leveraging the combined company’s expanded product
offerings, Merck expects to benefit from additional
revenue growth opportunities. The transaction is
anticipated to be modestly accretive to non-GAAP EPS
in the first full year following completion and significantly
accretive thereafter. Merck expects to achieve substantial
cost savings of approx. $3.5bn annually beyond 2011.
UPDATES
Exit multiples - Y/E 31/12/2008 Premium analysis
Multiples Value ($m) Offer price per share ($) 23.61
Revenue 2.3x 18,502 1 day before 33.92%
EBITDA 8.7x 4,946 1 month before 17.52%
EBIT 16.7x 2,585 1 day after 12%
Earnings 22.1x 1,753 Pre-rumour -
Advisers
Target / Seller Bidder
Financial Goldman Sachs
Morgan Stanley
Financial JPMorgan
Legal Shearman & Sterling (Advising Morgan Stanley) Legal Cleary Gottlieb Steen & Hamilton
Wachtell, Lipton, Rosen & Katz
Skadden Arps Slate Meagher & Flom
Sullivan & Cromwell (Advising Goldman Sachs)
Blake, Cassels & Graydon
Fried Frank Harris Shriver & Jacobson
PR - Financial Joele Frank Wilkinson Brimmer Katcher
mergermarket Intelligence
13-Mar-09 Schering-Plough’s animal health businesses could be bundled into Merck's Merial JV or sold - sources
10-Mar-09 Schering-Plough: Merck will term out USD 3bn bridge into bond market and may sell animal health business - sources
10-Mar-09 Merck and Schering initiated merger talks in December; J&J strongly seen as moving to arbitration - sources
20-May-08 Schering Plough: Remicade and Vytorin change of control makes JNJ and Merck the only likely buyers - sources
North America
• 23-Mar-09: With the assistance of lead arranger
JPMorgan, Merck has completed primary syndication of
$7bn of new credit facilities, which will be used to finance
the merger. Commitments for the new credit facilities
were provided by the following co-arrangers: Bank of
America, BNP Paribas, Citi, Credit Suisse, HSBC, The
Royal Bank of Scotland plc, Santander and UBS. Merck
has also secured commitments for the amendment of its
existing $1.5bn revolving credit facility that will allow the
facility to remain in place after the merger.)
Monthly M&A report – 15