Merck is buying rival Schering-Plough for $41.1 billion in cash and shares to expand its presence in emerging markets and to bolster its pipeline of potential new medicines, Aude Lagorce reports. Merck CEO Richard Clark, who will lead the combined company, says that Schering-Plough's "considerable biologics expertise" will complement Merck's novel proprietary biologics presence to create the best pipeline in the industry. The tie-up will double the number of potential drugs Merck has in Phase III development to 18. "It's a constructive deal because Merck recognizes that the level of access to Schering-Plough's pipeline is good," says Stephen …

Coca-Cola will give away a free sample of its Vault brand to anyone who buys PepsiCo's Mtn Dew in what Natalie Zmuda writes is "an audacious and quite possibly unprecedented move." Consumers can get a 16-ounce, 20-ounce or 24-ounce Vault free with any purchase of a 20-ounce Mtn Dew. The offer, billed as the "Vault Taste Challenge," encourages consumers to "Try Vault, with 30% more kick than Dew and a bold citrus taste." A coupon is good through late July. According to Beverage Digest, Mtn Dew (formerly and formally known as Mountain Dew) commands more than an 80% …

At Saks Fifth Avenue next month, designers Domenico Dolce and Stefano Gabbana will launch their Dolce & Gabbana The Makeup, a line of luxury cosmetics they've developed in partnership with Procter & Gamble. It includes $59 foundation, $30 lipstick and $44 rouge in gold-toned packaging -- a far cry from the drugstore brands CoverGirl and Max Factor that P&G has marketed in the past. Cosmetics are a way for the fashion house, which has 15 U.S. boutiques, to reach a broad audience. Gabbana casts the foray into cosmetics as democratizing the brand. "It is for the rich and not …

Cash-strapped municipalities across the country -- their coffers depleted by a dwindling tax base -- are chumming up with companies ready to pay for the honor of having their ad, name or logo on high-visibility civic properties. And, as the recession deepens, more cities are likely to explore these measures, reports Robert Klara. "If it's true that you can't fight city hall," he writes, "you may soon be able to buy an ad on it." The initiatives range from naming rights to massive vinyl ad wraps. Chicago is currently taking RFPs that would allow companies to buy the right …

Procter & Gamble is putting a renewed focus on cause marketing as both the company and charities feel the pinch of the recession, Elaine Wong reports. This month's P&GbrandSaver coupon booklet promotes three charity programs, for example, the most it ever has. Consumers who redeem coupons for brands like Tampax, Always, Pampers and PUR water filters will also be indirectly contributing to causes related to the brands. A survey by Boston-based brand strategy firm Cone of 1,071 U.S. adults last year found that 75% of consumers were more likely to buy a product when a portion of sales …

Pepsi is launching a premium all-natural cola called Pepsi Natural in 10 markets this month, Yana Polikarpov reports, and will roll out throwback versions of Pepsi and Mountain Dew in April for eight weeks. All three products will be made with all-natural sugar instead of high fructose corn syrup. Pepsi Natural will be available in retailers' premium or natural food aisles in single-serve or four-pack offerings. The cola contains natural caramel, kola nut and apple extracts, and is made with "lightly sparkling water." The markets are Chicago, Cleveland, Pittsburgh, Los Angeles, San Diego, San Francisco, Seattle, Portland, Ore., Las Vegas …

Barnes & Noble, which was an early proponent of electronic books -- only to reverse itself in 2003 citing a lack of interest -- has acquired Fictionwise, a leading retailer of e-books. B&N says it will launch a new e-bookstore this year, Jeffrey A. Trachtenberg reports, as the market heats up. Fictionwise co-founder Stephen Pendergrast says the company has sold as many as five million e-books; romance now accounts for 50% of all sales. He estimates total e-book sales in the U.S. at $100 million in 2008. The purchase comes a few days after …