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STORY UPDATE
KENILWORTH, NJ—November 19, 2007—Eight months after the initial announcement of their intention to buy Organon BioSciences, Schering-Plough announced it has completed the acquisition, creating a combined company with a significantly deepened portfolio of human and animal health products. Schering will keep its headquarters in Kenilworth but will establish global headquarters for its animal health business in Boxmeer, the Netherlands.
 
 
KENILWORTH, N.J.—The board of directors of Schering-Plough Corp. in mid-March approved a transaction under which Schering-Plough will acquire Organon BioSciences N.V., the human and animal health care businesses of Akzo Nobel N.V., for approximately EUR 11 billion in cash (US$14.4 billion based on closing exchange rate on March 9, 2007). The transaction, which is expected to close by the end of 2007, is anticipated to be accretive to Schering-Plough's earnings per share by about 10 cents in the first full year, excluding purchase-accounting adjustments and acquisition-related costs.
 
"With this transaction, we take another major step in our 'Action Agenda' to transform Schering-Plough into a global high-performance company for the long term," says Fred Hassan, chairman and CEO of Schering-Plough. "It is the right deal at the right time as we accelerate into the 'Build the Base' phase of our transformation."
 
Hassan says that Organon will be an excellent fit with Schering-Plough from the strategic, scientific and financial standpoints, adding, "[The acquisition] builds on our growing strength in primary care, giving us immediate access to central nervous system  and women's health care products. The acquisition of Organon BioSciences also fills a gap in our late-stage pipeline by adding five compounds in Phase III development and a number of promising projects in Phase II development. And, we believe that the two cultures are very much in tune."
 
The acquisition of Organon BioSciences also enhances Schering-Plough's strength in human and animal biologic products, including the potential to develop human vaccines. In light of Schering-Plough's expanding early pipeline, Organon BioSciences's strong biologics manufacturing capability is a further important asset for the combined company, Hassan says.
 
Organon BioSciences reportedly provides Schering-Plough with a growing base of products and businesses that boast top-line sales of nearly $5 billion. The pharmaceutical business, Organon, alone had sales of $3.4 billion in 2006.
 
Schering-Plough predicts that the transaction to be accretive in the first full year, excluding purchase-accounting adjustments and acquisition-related costs, and the company expects to achieve annual synergies of $500 million. However, it will take three years from the closing to reach this level of synergies, Hassan notes. Schering-Plough will finance the acquisition through a mix of cash, debt and equity.
 
"Given the complementary nature of our businesses and the track record of Schering-Plough's management team in executing transformational change, we expect a smooth and efficient transition that will allow us to unlock more value from the Organon BioSciences products and pipeline than would have been possible on a stand-alone basis," says Hassan.
 
Organon's research and manufacturing facility in Oss, the Netherlands, will be the center of Schering-Plough's global gynecology and fertility activities, while Organon's neuroscience research will continue in Newhouse, Scotland.
 
The transaction is subject to certain closing conditions, including regulatory approvals. Shareholder approval is not required for the transaction to be consummated by either Akzo Nobel or Schering-Plough. The parties have committed to execute a fully negotiated share purchase agreement upon completion of customary consultation procedures in the Netherlands, including with social partners.
 
Goldman Sachs & Co. acted as financial advisor to Schering-Plough, and Morgan Stanley acted as financial advisor to Akzo Nobel in this transaction. 

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