Exhibit (e)(1)

LATHAM·WATKINS^LLP

VERTRAULICHKEITSVEREINBARUNG

zwischen

Schering AG, 13342 Berlin

(,,Schering“),

und

Bayer AG, 51368 Leverkusen

(,,Bayer“)

(Schering and Bayer gemeinsam die ,,Parteien“).

Vorbemerkung;

LATHAM·WATKINS^LLP

I S. I WpÜG (die ,,Übernahmeentscheidung”) in Zusammenhang mit dem Gegenangebot Vertrauliche Informationen im Sinne von § 1 (1) dieser Vereinbarung zür Verfugung zu stellen.

Dies vorausgeschickt, vereinbaren die Parteien, was folgt:

§ 1

Vertraulichkeit

§ 2

Keine Augebotspflicht

Bayer ist nicht verpflichtet, das Gegenangebot abzugeben.

2

LATHAM·WATKINS^LLP

§ 3

Verschiedenes

Berlin, 19. März 2006

3

Confidentiality Agreement

between

In connection with an evaluation of the possibility of an acquisition of shares of Schering (the “Proposed Transaction”), Schering and/or Schering’s advisors and/or companies affiliated with Schering as set out in Sections 15 et seq. Stock Corporation Act (Aktiengesetz) (such companies, including Schering, collectively, the “Affiliates”) will furnish the Recipient with confidential information.

In view of the economic value of such confidential information for Schering, the Recipient undertakes (i) to keep such information confidential and (ii) to use the confidential information only for the purpose of evaluating the Proposed Transaction.

For purposes of this agreement, the term “Confidential Information” shall include (i) all information (whether prepared by Schering or otherwise) furnished to the Recipient by or on behalf of Schering, its Affiliates or Schering’s advisors, regardless of whether such information is furnished in writing, orally, in electronic form or otherwise, and (ii) all analyses, compilations, studies or other documents (regardless of the form in which any such analyses, compilations, studies or other documents are maintained) prepared by the Recipient or any of Recipient’s affiliates, officers, directors, employees or financial or legal advisors which contain or otherwise reflect any information as referred to in (i). In particular, Confidential Information shall include without limitation all information about the business, business processes, products, R&D activities, etc. of Schering and Schering’s Affiliates.

Confidentiality Agreement

“Confidential Information” does not include any information which

Confidentiality Agreement

In particular, the scope of the confidentiality obligation includes, without limitation, that

Confidentiality Agreement

3

Should the Recipient determine not to pursue the Proposed Transaction, the Recipient will promptly notify Schering of such decision. At the time of such notice, or if, at any earlier time, Schering so directs (whether or not the Recipient determines to pursue the Proposed Transaction), the Recipient and its Authorized Recipients will, as far as technically reasonably possible, promptly return to Schering all Confidential Information including all copies, extracts or other reproductions (regardless of the form in which such reproductions are maintained) or, if Schering so directs, Recipient and its Authorized Recipients will destroy such Confidential Information. Confidential Information which consists of analyses, compilations, studies or other documents (regardless of the form in which any such analyses, compilations, studies or other documents are maintained) prepared by Recipient or any of its Authorized Recipients (the “Analyses”) shall in any case be destroyed. Upon Schering’s request, the Recipient shall confirm in writing his compliance with the requirements set forth in this Section 7.

Neither Schering nor its shareholders, Affiliates or advisors nor any of their respective directors or employees or representatives shall be liable for the completeness and accuracy of the Confidential Information or non-confidential information which were made available to the Recipient or any of its Authorized Recipients. It is in the Recipient’s sole responsibility to evaluate the Proposed Transaction. Neither Schering, its board members or employees nor Schering’s Affiliates or advisors shall have any liability to the Recipient or its Authorized Recipients for any damages relating to or arising from their use of Confidential Information or non-confidential information which were made available to them.

The Recipient is aware that the Confidential Information or part thereof may constitute insider information (Insiderinformationen) as defined in Section 13 (1) of the Securities Trading Act (Wertpapierhandelsgesetz). The Recipient will take or has taken appropriate steps to ensure that all Authorized Recipients and other persons who may have gained knowledge of Confidential Information through the Recipient or his Authorized Recipients will comply with all restrictions applying to insider information under the Securities Trading Act.

This agreement shall remain in effect until the earlier of (i) the fifth anniversary of the date hereof or (ii) the date of the consummation of any of the Proposed Transaction involving the Recipient.

Confidentiality Agreement

Amendments and additions to this Confidentiality Agreement are only valid if they have been made in writing. This also applies to a waiver of this written form requirement.

Should any provision of this Confidentiality Agreement, in whole or in part, be or become invalid or unenforceable, the validity of the remaining provisions shall not be affected. In lieu of the invalid or unenforceable provision a provision shall apply which, to the extent legally possibly, comes as close as possible to what the parties had intended or would have intended, according to the spirit and purpose of this Agreement, if they had considered the matter.

This Confidentiality Agreement shall be governed by, and construed in accordance with, the laws of Germany. The courts of Berlin shall have exclusive jurisdiction. At the choice of Schering, Recipient may also be sued at its seat of registered office.

Confidentiality Agreement