Position of Merck Serono Concerning the Recommendation Made by CRCT of Geneva

GENEVA, July 26, 2012 /PRNewswire/ --

• Merck Serono has decided not to accept the recommendation regarding a supplementary increase in the redundancy payments to be made to all employees
• The Company wishes to prioritize seeking solutions which will enable employees to find new jobs
• Merck Serono is renewing its offer to provide additional benefits to reinforce support for the most vulnerable employees in economic terms

Merck Serono announced today its decision not to accept the recommendation issued by the Geneva Chamber for Collective Labour Relations (CRCT) further to the conciliation process which was held from July 3 to July 18, 2012, between the management of Merck Serono on the one hand and the representatives of the employees and the union UNIA on the other. The CRCT in particular recommended a supplementary increase in the redundancy payments to be made to all employees.

The decision of Merck Serono is motivated by the fact that what is offered by the Company to employees impacted by the restructuring of its activities in Switzerland is already very substantial in practice, by its willingness to prioritarily support social hardship cases, as well as its desire to prioritize seeking solutions which will enable employees to find new jobs, including the allocation of supplementary financial resources as appropriate.

The social plan offered by Merck Serono had already undergone improvements as a result of the consultation procedure which took place from April 25 to June 4, 2012. Within the context of the conciliation process conducted by the CRCT, Merck Serono management was prepared to make additional efforts to improve the social plan, but the supplementary measures proposed were rejected by the general meeting of employees held on July 18, 2012.

"We are sorry that the conciliation process conducted by the CRCT has not led to an agreement and that the additional benefits proposed by us in this context could not as a result be integrated into the social plan," said François Naef, Chairman of the Board of Directors of Merck Serono S.A. "In the spirit of openness and dialogue, we would nevertheless like to renew this offer of additional benefits within the context of an agreement under the auspices of the CRCT."

The supplementary measures proposed within the context of the conciliation process aimed to provide reinforced support for the most vulnerable employees in economic terms and in particular provided for the following:

-    A minimum guaranteed amount in severance pay (CHF 25,000 minimum);

-    An additional severance payment for employees who are 50 years old or more, including employees eligible for early retirement who would not elect for this option due to economic reasons;

-    Maintaining full severance pay for employees who resigned in the three months preceding the anticipated date of their severance;

-    A special fund of CHF 500.000 for cases of extreme hardship, in particular for laid-off employees who find themselves in a particularly difficult financial situation as a consequence of the closure of the Geneva site;

-    A CHF 1 million contribution to a fund implemented and managed by Geneva cantonal authorities to alleviate the impact of the closure of the Geneva site on the local employment market through a number of measures and programs.

If accepted by the employees within the framework of an agreement under the auspices of the CRCT, these benefits would be added to the measures of the current social plan which notably include:

• Severance pay based on length of service with the Company (one month's salary per year of service; a minimum of 2 months and a maximum of 12 months' salary);
• A job-to-job program for employees made redundant (outplacement program of variable duration depending on the current level of the post);
• The possibility of taking early retirement with better conditions from the age of 56.

Assuming an agreement is reached, this offer of additional benefits would represent an amendment to the current social plan and would be applied with retroactive effect for those employees who have already received their redundancy letter.

Furthermore, Merck Serono will continue to seek outplacement options for its employees, most notably:

• Discussions with partners, with initial results already announced (the Quintiles company has committed to making at least 100 job offers during the course of the next 3 months to Merck Serono employees currently based in Geneva);
• Contacts with other companies active in the region, notably with the organisation of an employment forum in September which will make it easier for Merck Serono employees and companies with vacancies on offer to establish contact with one another;
• Support for employees with setting up companies in the form of a fund of 30 million euros
• Participation in the task force established by the Council of State.

About Merck Serono

Merck Serono is the biopharmaceutical division of Merck KGaA. With headquarters in Geneva, Switzerland, Merck Serono offers leading brands in 150 countries to help patients with cancer, multiple sclerosis, infertility, endocrine and metabolic disorders as well as cardiovascular diseases. In the United States and Canada, EMD Serono operates as a separately incorporated subsidiary of Merck Serono.

Merck Serono discovers, develops, manufactures and markets prescription medicines of both chemical and biological origin in specialist indications. We have an enduring commitment to deliver novel therapies in our core focus areas of neurodegenerative diseases, oncology and rheumatology.

About Merck

Merck is a global pharmaceutical and chemical company with total revenues of €10.3 billion in 2011, a history that began in 1668, and a future shaped by more than 40,000 employees in 67 countries. Its success is characterized by innovations from entrepreneurial employees. Merck's operating activities come under the umbrella of Merck KGaA, in which the Merck family holds an approximately 70% interest and free shareholders own the remaining approximately 30%. In 1917 the U.S. subsidiary Merck & Co. was expropriated and has been an independent company ever since.

For more information, please visit http://www.merckserono.com or http://www.merckgroup.com