Merck, the German chemicals and drugs company, yesterday said it was keen to co-operate with national rival Bayer in spite of losing a bruising fight over control of Schering, the Berlin-based maker of oral contraceptives.

Michael Römer, Merck chief executive, said he could envisage the two companies finding common ground "in oncology, for example, the cardiology area, also diabetes" in the future.

The remarks look set to fuel speculation that Merck got more than a cash bonus for selling Bayer its 21.8 per cent stake in Schering, amassed as Bayer was trying to collect three-quarters of all shares in order to take over the group. Mr Römer said Merck's willingness to sell its Schering stake to facilitate the €17 billion ($21.4 billion) deal was not linked to any conditions forcing Bayer to do business with it. "That's simply not possible," he said. "That would be illegal."

But he said that pledges by both companies on Wednesday "to examine existing and future co-operation" were meant to prove that "there is a climate between us that will allow us to continue talking to each other about business."

Bayer agreed to pay Merck €89 per share, a premium of €3, for its Schering stake to rescue its tender, the result of which will be announced on June 22nd.

As German law demands shareholders be treated equally, Bayer has to pay all investors this price.

But Ulrich Huwald, an analyst at MM Warburg in Hamburg, was one of a number of observers who thought the drama of recent days could - quite legally - lead to a follow-on transaction between Bayer and Merck. "Something involving anti-cancer drugs would be top of my list," he said.

"If the price of a deal was fair and transparent, there's no reason this could not happen. In that respect, it's interesting [ everyone is] being so nice to each other."