We've been waiting for specifics on Merck's (NYSE: MRK) post-merger restructuring for months now, and they're finally here. The drugmaker, which bought Schering-Plough last year, says it will phase out operations at eight manufacturing plants and eight R&D sites worldwide. Office facilities will be consolidated as well.
Here's a list of the manufacturing sites slated to close (here's the R&D list): Comazzo, Italy; Cacem, Portugal; Azcapotzalco, Mexico; Coyoacan, Mexico; and Santo Amaro, Brazil. Merck also plans to sell off plants in Mirador, Argentina, and Miami Lakes, Florida.
Despite the closures, Merck says the company isn't backing off of growth in emerging markets--including Latin America. It's expanding capacity at two Latin American plants, one in Xochimilco, Mexico, and another in Campinas, Brazil.
As part of the site announcement, Merck reiterated its plans to cut its workforce by about 15 percent, or 16,500 jobs "across all areas of the combined company worldwide." And it confirmed plans to cut a total of $3.5 billion in annual costs out of the company by 2012. Along with today's moves, the restructuring that began in December will get Merck $2.7 billion to $3.1 billion toward that target.
The restructuring will cost money, too; Merck said it expects costs for "initial phases of the merger restructuring program" to range from $3.5 billion to $4.3 billion. The company plans to charge a portion of those costs against Q2 earnings.
- see the Merck release
- check out CEO Richard Clark's 2009 salary and benefits