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Astra, Merck to Restructure Joint Venture

BRIEFLY / PHARMACEUTICALS

June 20, 1998|Reuters

Sweden's Astra and Merck & Co. agreed to restructure their joint venture in a deal industry sources said could be worth $10 billion to $15 billion for Merck, and gives Astra control of the venture. The companies said in a statement that Astra Merck's business will be combined with Astra's wholly owned Astra USA Inc. subsidiary in a new U.S. limited partnership, named Astra Pharmaceuticals, over which Astra will have management control as the general partner. Merck said the agreement is expected to close July 1. The deal gives Astra the right to buy out Merck's stake in 2008 for no less than $4.4 billion in cash. On Wall Street, Whitehouse Station, N.J.-based Merck's stock jumped after the announcement but gave back the gains and ended down $2 at $126.88 on the New York Stock Exchange. Astra's American depositary receipts rose 56 cents to $21.06, also on the NYSE. Most of the joint-venture revenue comes from Prilosec, the top-selling ulcer drug. The newly formed entity, Astra Pharmaceuticals, will have headquarters in Wayne, Pa., with production and development facilities in Westborough, Mass.

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