SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 19, 1997
SCHERING-PLOUGH CORPORATION
(Exact name of registrant as specified in its Charter)
New Jersey 1-6571 32-1918501
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
One Giralda Farms, Madison, New Jersey 07940-1000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 822-7000
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On May 19, 1997, Schering-Plough Corporation (the "Company")
announced an agreement under which the Company will acquire
certain subsidiaries of Mallinckrodt Inc., comprising the
worldwide animal health business of Mallinckrodt Inc., for $405
million in cash. The Company expects to fund the transaction
through internal cash flow and short-term borrowings. The
transaction, which is subject to appropriate regulatory
approvals, is expected to be completed in July.
A press release concerning the transaction is attached
hereto as an exhibit.
Exhibits.
Exhibit A - Schering-Plough Corporation Press Release issued May
19, 1997
MADISON, N.J. May 19, 1997 - Schering-Plough Corporation today
announced an agreement under which Schering-Plough will acquire
Mallinckrodt Veterinary Inc. (MVI), the worldwide animal health
business of Mallinckrodt Inc., for $405 million in cash. MVI
will be integrated into Schering-Plough Animal Health (SPAH) to
form the world's sixth largest animal health business, with
annual sales of approximately $650 million.
The acquisition will transform SPAH from a successful niche
player in worldwide markets to a leadership position. The
acquisition will enable SPAH to compete more effectively in a
consolidating animal health industry by achieving four key
objectives: broaden product lines; expand geographic
distribution capabilities; add promising new research
technologies and products in development; and generate sufficient
cash flow and profits to internally fund competitive R&D levels.
"The addition of Mallinckrodt Veterinary to Schering-Plough
Animal Health creates a world-class animal health business, with
complementary product lines, research targets and geographic
strengths," said Richard Jay Kogan, Schering-Plough president and
chief executive officer.
In a separate press release, Mallinckrodt noted that the
transaction fulfills the company's expectation, reported in
August 1996, to align its animal health business with a company
that possesses core technology more directly related to the
development of animal health products.
Schering-Plough said that the acquisition should not be
dilutive to 1997 earnings and is expected to have a positive
effect in 1998 and beyond. The company expects to fund the
transaction through internal cash flow and short-term borrowings.
The transaction, which is subject to appropriate regulatory
approvals, is expected to be completed in July.
"In integrating Mallinckrodt's animal health business, we
are committed to building a focused and efficient organization,"
said Raul E. Kohan, president, Schering-Plough Animal Health.
"Our objective will be to continue driving profitable growth
through the reliable delivery of quality products and innovative
services while achieving cost savings and business synergies.
MVI's research capabilities in viral vectors, gene deletion and
controlled-release technology hold considerable promise and will
be an important element in our new product discovery program.
The extensive resources MVI brings ensures that we will have the
capability to realize the full potential of our existing products
and those in development in all major markets."
The combined organization will compete in a $10 billion
worldwide animal health market (excluding the nutritional and
feed additive segment). MVI will strengthen SPAH's position in
the United States and Europe and give it an effective presence in
Latin America and the Pacific Rim. MVI's product lines
complement SPAH's portfolio, notably in parasiticides, growth
promotants and in offering a broader biologicals (vaccines) line
for companion animals, livestock and poultry.
MVI, with 1996 fiscal year worldwide sales of $456 million,
has major product lines in parasiticides, growth promotants and
biologicals, and one of the industry's most extensive global
distribution networks. Approximately 25 percent of sales are in
the United States, 35 percent in Western Europe, 20 percent in
Latin America and 10 percent in Asia. Leading products include
RALGRO, a growth promotant implant; LEVASOLE and TRAMISOL, broad-
spectrum anthelmintics (parasiticides); CEPRAVIN, a cephalosporin
antimicrobial; SYSTAMEX and AUTOWORM anthelmintics; and ESTRUMATE
and PLANATE, prostaglandin reproductive hormones. MVI has about
2,100 employees with major facilities in the United States,
United Kingdom, France, Brazil, Germany, Australia and New
Zealand.
SPAH, with 1996 worldwide sales of $196 million, competes
primarily in the anti-infectives and biologicals segments. Major
species categories are bovine and companion animals. Leading
products are NUFLOR, an antibiotic for bovine respiratory
disease; BANAMINE, an equine anti-arthritic; OTOMAX, a canine
otic ointment; and OPTIMMUNE, a canine ophthalmic ointment.
About half of SPAH sales are in the United States and a third in
Western Europe. SPAH has about 550 employees, with major
facilities in the United States, Shanghai and France.
Mallinckrodt serves health care and specialty chemicals
markets worldwide. The company is a major producer of diagnostic
imaging agents, medical devices, pain relief pharmaceuticals,
catalysts, and laboratory and microelectronic chemicals. The St.
Louis, Missouri-based company, with fiscal 1996 net sales of $2.2
billion, sells more than 1,000 products in more than 100
countries.
Schering-Plough is a research-based company engaged in the
discovery, development, manufacturing and marketing of
pharmaceutical and health care products worldwide.
The information in this press release includes certain
forward-looking information. Due to market factors and the
nature of the product development and regulatory approval
processes, the forward-looking statements contained in this press
release are subject to risks and uncertainties. For further
details and a discussion of these risks and uncertainties, see
the company's Securities and Exchange Commission filings,
including Exhibit 99.1 of the company's 1996 annual report on
Form 10-K.
# # #
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
SCHERING-PLOUGH CORPORATION
By: /s/ Thomas H. Kelly
Thomas H. Kelly
Vice President and Controller
Dated: June 2, 1997
