Germany's pharmaceutical industry was shaken up last month when Schering AG found itself as a target for takeover by two of its national competitors: Merck KGaA and the Bayer Group. Events unfolded at remarkable pace, with Merck's initial offer of US$13.9 B being rejected immediately and Schering stepping in with its US$19.76 B offering within 2 weeks. The resulting outcome sees Merck left out in the cold, while Schering and Bayer look set to become by far the largest German pharmaceutical company to date. This article looks at the motivation behind the competitive offers and outlines the strategic issues that may have influenced Schering's decision-making process.