Schering Plough Fred Hassan’s six-year reign as chairman and chief executive officer of Schering-Plough Corp. is hitting an explosive climax with a $41.1 billion merger deal with pharma giant Merck & Co.

Under the agreement, approved by both companies’ boards last month, Schering-Plough and Merck will combine under the name Merck. Schering-Plough shareholders will receive Merck stock and $10.50 in cash for each of their shares. The deal is expected to close in the fourth quarter of 2009.

Merck Chairman, President and Chief Executive Officer Richard T. Clark will lead the combined company. Hassan will participate in the integration of the two companies, until the transaction is closed. The companies said that a priority is keeping the best talent from both companies and expect a majority of Schering-Plough employees to remain with the combined company, though both will institute a hiring freeze.

The combined company will have its corporate headquarters in Whitehouse Station, N.J., Merck’s current headquarters. Schering-Plough is headquartered in Kenilworth, N.J.

The transaction is the sixth largest pharmaceutical deal ever and is the second largest merger this year, according to Thomson Reuters. In January, Pfizer Inc. acquired Wyeth for $68 billion.

“We are creating a strong, global health-care leader built for sustainable growth and success,” Merck’s Clark said in a statement about the merger with Schering-Plough. “The combined company will benefit from a formidable research and development pipeline, a significantly broader portfolio of medicines and an expanded presence in key international markets, particularly in high-growth emerging markets. The efficiencies we gain will allow us to invest in strategic opportunities, while creating meaningful value for shareholders.

“We look forward to joining forces with an outstanding partner we know well and that shares our commitment to patients, employees and the communities where we work and live,” he added. “Through their talent and dedication, Schering-Plough employees have built an industry leading R&D engine and late-stage pipeline that is complementary to our own. We are confident that, together, Merck and Schering-Plough will make a meaningful difference in the future of global health care.”

“The talent and dedication of Schering-Plough scientists has helped to build an outstanding clinical development pipeline,” Peter S. Kim, Merck executive vice president, and president of Merck Research Laboratories, said in a statement. “Schering-Plough's considerable biologics expertise will complement Merck's novel proprietary biologics platform and aligns with our commitment to build a powerful biologics presence. The Schering-Plough and Merck pipelines are remarkably complementary and will greatly increase our ability to deliver important new medicines to patients. I believe the combined pipeline will be the best in the industry, by far.”

The combination of the two companies will significantly broaden Merck’s portfolio of medications, as well as doubling the number of potential medicines in last stage development, according to the company. Combined therapeutic areas of focus include: cardiovascular, respiratory, oncology, neuroscience, infectious disease, immunology and women’s health.

Merck and Schering-Plough had combined 2008 revenues of $47 billion. According to the Merck, the deal with bring a cost savings of approximately $3.5 billion annually after 2011.

Started in 1891, Merck discovers, develops, manufactures and markets vaccines and medicines. The company has 59,800 employees worldwide. Products are sold in more than 140 countries and $4.9 billion was spent on research and development in 2007. The company’s largest selling product is Singulair, oral medicine for the treatment of asthma, allergic rhinitis and exercised-induced bronchoconstriction, which sells over $4 billion a year. Other key products include: Cozaar, Hyzaar, Gardasil, Januvia, Vytorin and Zetia.

Schering-Plough was established in the late 1800s as the U.S. subsidiary of Schering AG, a German-based pharmaceutical and chemical company. It was incorporated in New York City in 1928 and in New Jersey in 1935. The company develops therapies for human prescription, animal health and consumer health-care products.

The company has 51,000 employees, business operations in more than 140 countries and reported $18.5 billion in net sales in 2008, while investing $3.5 billion in research and development. Key products include: Vytorin, Zetia, Remicade, Nasonex and Temodar.

“Over the last six years, Schering-Plough colleagues have transformed our company into a strong competitor in the global pharmaceutical industry. We have built a strong, diverse business and a robust pipeline that offers hope to patients who are waiting for new medicines,” Schering-Plough’s Hassan said in a statement.  “I am proud of what we have accomplished. Our success is a testament to the hard work and dedication of our colleagues in every country.

“We are joining forces with Merck, our long-term partner in our cholesterol joint venture, to create a dynamic new leader in the pharmaceutical industry,” he added. “By harnessing the strengths of both companies, the combined entity will be well-positioned to further deliver on our shared goal of discovering new therapies for patients to help them live healthier, happier lives.”