J&J Seeks to Arbitrate Schering Remicade Deal

Johnson & Johnson told Merck it plans to seek arbitration on whether it can pull out of a blockbuster drug partnership with Schering-Plough as that company sells itself to Merck for $41.1 billion.

Merck is in the process of buying Schering-Plough, but the companies have structured the deal as a reverse merger, allowing Schering-Plough to remain as the surviving entity. That's intended to avoid triggering terms in J&J's deal with Schering-Plough that allow it to pull out of the deal if control of Schering changes hands.

At stake in arbitration is about $2 billion a year in revenue to the newly combined company from the arthritis drug Remicade.

Merck says it still expects the deal to close by the end of the year.

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