Merck (MRK) said on Monday that it would acquire Schering-Plough (SGP) for $41.1 billion. Schering-Plough shareholders will receive $23.61 a share, representing a premium of about 34 percent over Schering's Friday's close. The benefits: a bigger pipeline, joint R&D, strategic alliances, and of course financial benefits such as cost cuts. Not surprising, SGP shares are up over 18 percent in premarket trade, MRK down over 4 percent.

American International Group (AIG) bailout money didn't go just to AIG, published reports revealed, putting the financial sector in focus again Monday. Some foreign banks, as well as top U.S. financial institutions, received $50 billion of AIG aid, including Goldman Sachs (GS), Bank of America (BAC) and Wachovia, now owned by Wells Fargo (WFC). (The Wall Street Journal's list, Fortune's list.) AIG, meanwhile, appealed for its fourth U.S. rescue by telling regulators the company's collapse would be "catastrophic," according to Bloomberg. AIG shares are up 2.8 percent in premarket trade.

Dow Chemical (DOW) said on Sunday that settlement talks with Rohm & Haas (ROH) were going "quite well" as the companies were set to meet in court after Dow backed away from a deal to acquire Rohm. DOW shares gained 1.8 percent, ROH 3.3 percent in premarket trade.

Bank of America (BAC) has reneged of job offers made to MBA students graduating from US business schools this summer. It's the fist bank to do so, and it is citing conditions of the bailout deal such as preventing applying for H1-B visas for highly skilled immigrants if they have recently made US workers redundant. BAC shares are up about 2 percent in premarket trade.

Lloyds Banking Group (LYG) reached a deal with the U.K. government to insure up to 260 billion pounds of assets in return for increasing its stake up to 77 percent from a current 43 percent. LYG shares are plunging 10 percent in premarket trade.

McClatchy (MNI) said Monday that it plans to eliminate 1,600 jobs, or 15 percent of its work force.

General Electric's (GE) finance arm, GE Capital, plans to sell more bonds under a government guarantee program, according to CNBC.

Analyst calls:

  • Amazon.com (AMZN) was upgraded at Piper Jaffray from Neutral to Buy.
  • Best Buy (BBY) was upgraded at William Blair from Market Perform to Outperform.
  • Coca-Cola (KO) was upgraded at Credit Suisse from Neutral to Outperform.
  • Halliburton (HAL) was upgraded at FBR Capital Markets from Market Perform to Outperform.

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