We'll open today, with a sincere hat tip to "Mr. Ed"(!) at Pharmalot for the below link, and with an apology to my readers for the late start here on Pulaski Day, in the City of Big Shoulders. . . had duties to attend to.
It seems the Dutch judicial authorities are going to rule on March 11, 2011 as to whether Merck will be permitted to shutter the legacy Organon to Merck (by way of schering-Plough) Oss R&D operation, a BioScience facility -- and thus put over 2,300 out of work (likely permanently), there. Here's a bit from the Sunday reporting by the DutchNews.nl wires:
. . . .US pharmaceuticals giant Merck turned down an offer for its Organon unit in Oss because it would cost the company $700 million more than closing it down, the company told a court hearing on Friday.
That and the complexity of the transaction were reasons enough to reject the offer, Merck said.
The works council and supervisory board at the Organon plant went to court in an effort to have takeover talks reopened. . . .
We will keep you posted.
Moreover, if it's not already obvious, here -- the bulk of this particular debacle points directly to the recklessness of one Fred Hassan (see the twin Sunday related posts, here, and here), and to his suppine executive team -- of Carrie Cox, Bob Bertolini, Brent Saunders, Tom Koestler and Tom Sabatino. But do not forget the lax role of the board of legacy Schering-Plough here, either --as they appear to have just blithely accepted whatever form of manure Hassan and team were shoveling at the moment as Gospel -- from about 2006 through mid-2009. Those suppine board members included Patricia Russo, C. Robert Kidder, Hans Becherer, Thomas Colligan, Eugene McGrath, Carl Mundy, Antonio Perez, Jack Stahl, Craig Thompson, Kathryn Turner, Robert Van Oort and Arthur Weinbach -- among other former Schering-Plough directors.
Shameful.
3 comments:
In court it appeared that Whitehousestation was talking to Takeda and the Dutch branch was talking to Aspen (we think).
Merck never planned a deal. The name Organon NV contains all patents, registrations and so on, so Merck has to write off too much of value when selling the Oss plant with the name Organon NV, that's what I think it's all about.
I hear you -- and thanks for the insights!
As to write-downs of IP, though. . . .
After years of front-line experience, I do know a little bit about doing international transactions of this sort in pharma and biotech -- at least from the perspective of a public US multi-national as principal.
If Merck were truly interested in a Dutch job-saving deal (intact), a simple license to the IP (either coupled to a transfer of all the IP to the buyer of Oss -- with a non-exclusive "in-license" back to Merck), or an "out-license" (to the intact buyer, on an exclusive basis), coupled to Merck retaining the Dutch IP, as the seller -- all accomplished with a stepped-series of patent assignments and licenses, intra-company, prior to the closing any such deal. . .
would all lead to a minimal write-off scenario.
So -- net, net -- I would say that I concur with you: I don't think Whitehouse Station was highly motivated to do an intact deal. That is, it could have, if it really wanted to.
That said, I do think any buyer was going to expect "transition services" support from Merck. In a Dutch setting, I actually believe the mentioned $700 million figure would be the likely size of that support obligation (as compared to closing the facilty, outright).
While I feel most of this falls at Hassan & Co.'s feet -- I do fell it is fair to point to the particularly onerous Dutch labor rules, as well.
It is simply hideously expensive to do organic transactions in Dutch pharma, if any workers are to be displaced -- as they so often are.
Namaste, and do stop back!
There are oother issues for The Netherlands. All environmental licences to work with particular chemicals and modified materials are licended to Organon NV. When selling building to another firm, there must be a declaration that the soil is clean it is nt. Buildings are to from Organon NV. So buying that name is important fr a firm that buys the location in Oss.
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