Bayer Ups Schering Bid to $20B

Bayer AG (BAY) on Thursday made its official takeover bid for fellow German drugmaker Schering AG, offering 16.5 billion euros ($20.01 billion), slightly more than its previous 16.3 billion euro ($19.76 billion) offer that Schering's board had recommended be accepted.

Leverkusen, Germany-based Bayer said it made a final takeover offer of 86 euros ($104.28) per share. The increase over the previously announced offer came primarily because Schering AG had issued shares from its own shareholding for fulfillment of employee options in the interim, Bayer said in a statement.

Bayer's offer for Berlin's Schering trumped a hostile 14.9 billion euro ($18.07 billion) offer made March 13 by a third German company, Merck KGaA, which abandoned its takeover bid after Bayer made its offer.

The planned merger of Schering AG and the Bayer pharmaceuticals division will create a new heavyweight of international standing in pharmaceutical specialty products.

It is also expected to result in the loss of some 6,000 jobs from a work force that will number about 60,000 when Schering is combined with Bayer's pharmaceuticals business. The combined company is to be named Bayer-Schering Pharmaceuticals and have its headquarters in Berlin.

Bayer AG said it will announce the management of the new entity when the offer is no longer subject to conditions.

Those conditions are primarily the minimum acceptance threshold of 75 percent of Schering shareholders and the go-ahead from European and U.S. antitrust authorities.