German pharmaceutical company Bayer is back on track to seal its €17bn ($21.4bn) takeover of rival Schering ahead of a deadline midnight last night, after rival suitor Merck dropped its opposition to the deal and agreed to sell its 21.8% stake.

Bayer, which launched its agreed bid for Berlin-based Schering at €86 per share in March, said this afternoon it will buy Merck's stake in the company for €89 per share. Under German law, it will have to offer other shareholders the same price, pushing the price of the acquisition from €16.5bn to €17bn.