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It doesn't look as if Merck is letting Schering-Plough (NYSE: SGP ) bring along too many of its high-priced treasures, though. Only the two divisions for which Merck didn't have anyone in place -- animal health and consumer health care -- will be headed by executives who previously worked for Schering. And one of those is being filled only on an interim basis while Merck searches for a replacement.
But even though the new Merck will look a lot like the old Merck at the top, Merck did say that about 40% of Schering's "senior leaders" will be headed to the new company.
The intertwined nature of the pharmaceutical industry has made this merger as complex as a polygamists' divorce. The acquisition of Schering would allow Johnson & Johnson (NYSE: JNJ ) to end its agreement with Schering to market anti-inflammatory drugs Remicade and Simponi overseas. To avoid triggering that clause, Merck set up the acquisition as a reverse merger, so that technically, Schering is buying Merck and then changing its name to Merck. An arbiter will probably end up deciding whether Merck's scheme works.
Merck also had problems with its partners. After the merger, it was going to be in an awkward position of having two competing animal-health divisions: its joint venture with sanofi-aventis (NYSE: SNY ) and Schering's animal-health division. To keep sanofi happy, Merck sold its half of the joint venture to sanofi. Of course, nothing is that easy. The companies set up the deal so that sanofi has the option of teaming back up with Merck by incorporating Schering's animal-health division in a new joint venture (and there could go that last Schering executive). The details are remarkably multifaceted.
Meanwhile, even though the wedding details are almost complete, investors may have to wait awhile to know whether the purchase was a good investment for Merck. Unlike the Pfizer (NYSE: PFE ) -Wyeth (NYSE: WYE ) deal, which seemed to be mostly driven by cost-saving synergies, Schering's pipeline was a big driver for this purchase -- and the pipeline will take some time to have an impact on revenue.