February 15, 2013 in Business

Merck, investors reach settlement

 

TRENTON, N.J. – Merck & Co. has agreed to pay $688 million to settle two long-running lawsuits brought by investors who alleged the drugmaker delayed releasing bad news on its blockbuster cholesterol drugs to prevent a drop in sales.

Merck, the world’s third biggest drugmaker by revenue, said Thursday that it agreed to the settlement because it’s in the best interest of the company and current shareholders. It is taking a charge of nearly a half-billion dollars against 2012 earnings.

The delay in releasing results of a study that was meant to bolster sales of pricey cholesterol pills Zetia and Vytorin triggered criticism by analysts, investors, some scientists and the media – and ultimately an investigation by Congress.

The maker of Januvia Type 2 diabetes pills and the Gardasil vaccine against sexually transmitted cancers admitted no wrongdoing. The deal must be approved by a federal judge.

Probe of Penguin merger ends

WASHINGTON – The Justice Department has closed an investigation of a proposed merger between Penguin and Random House and will take no action to stop the deal that would create the world’s largest publisher of consumer books.

Media company Pearson seeks to merge its Penguin Books division with Random House, which is owned by German media company Bertelsmann. The proposed publishing house would have about a quarter of the consumer book market.

Penguin and Random are two of the so-called “big six” publishers in the United States. Their merger will bring together such Random House authors as E L James and John Grisham and such Penguin writers as Patricia Cornwell and Elizabeth Gilbert.

The merger is widely seen as an effort to counteract the power of Amazon.com, which has worried publishers by aggressively cutting prices on e-books. Deals struck with Apple in 2010 that gave publishers more control over e-book costs led to a Justice Department antitrust lawsuit in the spring of 2012. Penguin, one of the five publishers sued, has settled since the merger was announced last fall.

Word of the U.S. government’s decision on the merger came from the companies, and Justice Department spokeswoman Gina Talamona confirmed it on Thursday.

Bertelsmann will own 53 percent and Pearson 47 percent of shares in the proposed publishing house, which will encompass all of Random House and Penguin Group’s publishing units in the U.S. and six other countries.

Trump’s casino sells for $20 million

ATLANTIC CITY, N.J. – Trump Plaza, the Boardwalk centerpiece of Donald Trump’s onetime Atlantic City empire, was sold Thursday to a California company for $20 million in the cheapest of a series of bargain-basement deals for distressed gambling halls in the struggling New Jersey seaside resort.

The Meruelo Group of Downey, Calif., plans to close the deal by May 31. It is the lowest price ever paid for a casino in Atlantic City.

The company has not decided on a new name for the casino-resort, but said it will not continue to use the Trump name.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email