May 1, 2006
Via Facsimile ((212) 474-3700) and U.S. Mail
Peter S. Wilson, Esq.
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
RE: Schering Aktiengesellschaft
Schedules 14D-9C March 23 and 27, 2006, April 4, 11, and 18,
2006
Schedule 14D-9 filed April 18, 2006, amended April 19, 20,
and
27, 2006
File No. 005-59797
Dear Mr. Wilson:
We have the following comments on the above-referenced
filings.
Schedule 14D-9
Joint Opinion
Summary Financial Information, page 6
1. Please tell us the reason for including the "Summary Financial
Information" in your Schedule 14D-9. If it is required to be
presented pursuant to local law, expand the introduction to the
"Summary Financial Information" to explain that it has been
presented
to comply with local law, that it is not required to be furnished
under the SEC`s rules, and that it does not include all the
disclosures that would be required under the SEC`s rules, such as
a
U.S. GAAP reconciliation. Also, the introduction should explain
that
complete information, including the U.S. GAAP reconciliation, may
be
located in the Registrant`s filing on Form 20-F available on the
SEC`s website.
2. Please revise to include the amount of marketing and selling
costs
for 2005.
Background of the Offer, page 8
3. Please quantify the amount of the "significant break-up fee"
relating to Bayer`s potential increase of its offer to EUR 87 per
share (page 10). If an amount was not determined, please state so
and clarify both (i) the basis for your executive board having
doubts
about the "stated amount," and (ii) how the London City Code
guideline would have affected such a determination. Also, clarify
why your supervisory board was unable to be involved in the matter
of
a break-up fee at the time.
4. With respect to your disclosure in the second full paragraph of
page 11 that the executive board would not seek competing offers
or
encourage such offers, please describe what, if any,
communications
were held with Merck with respect to its proposed offer. Did the
executive board contact Merck seeking an increase in the
consideration offered?
5. Please provide us supplementally a copy of the presentation
given
by Morgan Stanley to members of your boards on March 27, 2006.
Persons Employed and Compensated, page 12
6. It appears that the additional fee described in clause (4) of
your
disclosure relating to Morgan Stanley and a similar fee for DrKW
would both be payable in connection with the current transaction.
Please quantify those fees.
Fairness Opinion Provided by Morgan Stanley, page 15
7. With respect to the Selected Transaction Analysis, we note that
you describe two calculations but presented only one in the table.
Please revise to disclose the results of each calculation
described.
8. Please quantify generally the fees received by Morgan Stanley
and
its affiliates from Bayer AG and its affiliates. Please apply
this
comment to the disclosure relating to the DrKW fairness opinion.
Fairness Opinion Provided by Dresdner Kleinwort Wasserstein, page
23
9. We note that the compound 06-08 EPS growth results for the
current
transaction were lower than those resulting from the comparable
companies. Please disclose how, if at all, this affected DrKW`s
fairness opinion.
10. With respect to the Selected Transactions Analysis, please
provide the dates of each transaction listed. Also, please add a
column to the table on page 27 to show the premiums for the
current
transaction.
11. Please disclose with more specificity the overlaps between the
boards of the transaction`s parties and DrKW`s affiliates.
Valuation Opinion Provided by BDO, page 28
12. Please disclose the "appropriate discount rate" referred to in
the last paragraph of page 31.
Interests of the Members of the Executive Board or the Supervisory
Board, page 39
13. With a view toward revised disclosure, please tell us your
basis
for not providing a breakdown of the information in this section
by
individual board member.
14. Please quantify the contractual compensation due the members
of
your boards, as described on page 40.
Exhibit 99(A)(2)
15. We note the disclaimer that you do not undertake any
obligations
to update or revise forward-looking statements to reflect new
information, future events or circumstances or otherwise, here and
in
several of your previous and subsequent press releases. This
disclosure is inconsistent with your obligation under Rule 14d-
9(c)
to amend the schedule to reflect a material change in the
information
previously disclosed. Please confirm that you will avoid making
such
statements in future press releases and filings.
Closing Information
Please amend your filing promptly to comply with our
comments.
If you do not agree with a comment, please tell us why in your
response. If the information you provide in response to our
comments
materially changes the information that you have already provided
to
security holders, disseminate the revised materials in a manner
reasonably calculated to inform them of the new information.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company is in possession of all
facts relating to its disclosure, it is responsible for the
accuracy
and adequacy of the disclosures it has made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Please direct any questions to me at (202) 551-3619. You
may
also contact me via facsimile at (202) 772-9203. Please send all
correspondence to us at the following ZIP code: 20549-3628.
Sincerely,
Daniel F. Duchovny
Special Counsel
Office of Mergers &
Acquisitions
Peter S. Wilson, Esq.
Cravath, Swaine & Moore LLP
May 1, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE