German pharmaceutical and chemical giant Merck KGaA has agreed to acquire US life sciences company Sigma-Aldrich for $US17 billion, or $US140 per share in cash.
That’s a massive 37% premium to SIAL’s Friday closing price of $US102.37.
Here are the key details from the announcement:
• Merck to acquire Sigma-Aldrich for $US140 per share in cash, valuing company at approx. $US17 billion (€13.1 billion)
• Acquisition expands Merck Millipore’s global reach, increasing the company’s presence in North America and adding exposure to fast-growing Asian markets
• Customers benefit from broader offering of complementary products and capabilities and leading e-commerce platform in the industry
• Merck plans to maintain significant presence in St. Louis and Billerica, Massachusetts
• Life Science contribution to Merck earnings more than doubles
• Transaction expected to be immediately accretive to EPS pre and EBITDA margin
“This transaction marks a milestone on our transformation journey aimed at turning our three businesses into sustainable growth platforms,” Merck Chairman Karl-Ludwig Kley said. “For our life science business it’s even more than that: it’s a quantum leap. In one of the world’s key industries two companies that fit perfectly together have found each other to present a much broader product offering to our global customers in research, pharma and biopharma manufacturing, and diagnostic and testing labs.
“As such, the combination of Merck and Sigma-Aldrich will secure stable growth and profitability in an industry that is driven by trends such as the globalization of research and manufacturing. What’s more, the combination gives us the possibility to invest even more in innovation going forward. We are delighted to make this compelling proposition to Sigma-Aldrich’s shareholders, who will obtain full and certain cash value for their shares.”