Merck KGaA to buy Millipore for €5bn
The deal values Millipore at €5.3bn ($7.2bn) and follows just days after the US biotechnology supplier said it had begun a strategic review that could include a sale.
Unconfirmed reports had suggested that Thermo Fisher Scientific tabled a €4.4bn takeover bid in an effort to strengthen its position in the biologics manufacturing technology sector.
The German drugmaker’s emergence as suitor, therefore, comes as something as a surprise. However, according to Merck chairman Karl-Ludwig Kley, merging the firms makes strategic sense.
Dr Kley suggested that: “Combining Millipore’s bioscience and bioprocess knowledge with our own expertise in serving pharma customers, we will be able to unlock value in our chemicals business and transform it into a strong growth driver.”
Merck’s chemicals business, which makes a wide range of products ranging from active pharmaceutical ingredients (API) and cosmetic ingredients to liquid crystals for high-tech televisions, brings in about 25 per cent of the firm’s annual €9bn revenue.
The German firm aims to increase this contribution to around 35 per cent by combining the unit with Millipore to create a €2.1bn business that offers pharma and biopharma customers “integrated solutions beyond chemicals.”
Details of the deal, which still needs to be approved by shareholders, have not yet been released, although Merck has said it plans to combine Millipore’s headquarters in Billercia, Massachusetts with its existing US unit.
Merck also said it “plans to build on Millipore’s talented workforce and intends to retain its senior management,” and predicted that the combined business will generate annual cost synergies of €75m in three years.
