Merck & Co. share prices fell sharply at least on European exchanges after The Wall Street Journal reported that the pharmaceutical giant had booked $12.4 billion in revenues over three years from its prescription-benefit subsidiary Medco that were never collected. The funds in question, disclosed in a filing last Friday with the Securities and Exchange Commission, were copayments made by patients to pharmacies, which the pharmacies had kept. Merck said it subtracted the same amount as an expense in a revenue-recognition policy that was in line with standard accounting practices. Merck stock was off by 12 percent in Frankfurt and on the Instinet electronic exchange and also was falling in London as the Monitor went to press. Medco, which was expected to be partially spun off as soon as this week in an initial public offering, accounted for 59 percent of Merck's revenue last year.
eBay Inc., the online marketplace, agreed to acquire PayPal, the electronic payment platform most favored by its users. The all-stock deal, valued at $1.5 billion, is subject to shareholder and regulatory approval. PayPal is based in Mountain View, Calif.; eBay in nearby San Jose.
A $1.1 billion initial public offering that would have been the largest in Ireland in three years was withdrawn by snack food and beverage giant Cantrell & Cochrane. The company cited "current equity market conditions" and said it would reevaluate its position once the market had stabilized. The company also is known as C&C Group.