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This is part of a case series. Darmstadt, September 2006. The Serono deal was long in the making; it had eluded the Merck Group, a 338-year-old German global pharmaceutical and chemical enterprise, for months. So much so that last March, the Merck Group and its family owners had hopped onto the Schering AG acquisition train to ensure the growth it needed to remain competitive in the cut throat pharmaceutical business. When the 14.6 billion euros hostile offer they made for Schering was rejected in favor of a friendly offer from Bayer, it was difficult not to feel despondent. For months, Jon Baumhauer, the Chairman of the Family Board and influential member of the Executive Board of E Merck OHG, had sustained the commitment of the family owners to a transformational merger that would define the future of Merck. Maintaining such secrecy among the 120-plus family partners representing the 10th to the 12th generations of Merck family owners was no small feat, but the absence of a deal was starting to create tensions on all levels. The offer from Ernesto Bertarelli, the largest shareholder of Serono, a Swiss-listed, family-controlled biotechnology firm, was hardly a surprise. Ernesto, through the company's investment bankers, had peddled the firm for months to all major pharma companies in the world, but had found few takers. The surprise was the newfound willingness of Serono to consider a negotiated deal. Merck's Executive Board, the family and Merck's advisers had kept an eye on Serono throughout the year. The company was attractive for its family culture, strong R&D capabilities, significant US presence, a rich product pipeline and of course world-class biotechnology manufacturing competencies. Its size would give Merck much needed critical mass, but the deal was not cheap. It required extensive leverage and new equity injections from the family, its risk profile was higher than Merck's and cultural differences ran deep. Now the deal was within reach. Was this the transformational opportunity the Merck family sought? It was time to put the 'courage and pioneering spirit' of the family firm to the ultimate test.