Tags: US | Merck | Millipore

Germany's Merck Buying Millipore for $6 Billion Plus Debt

Monday, 01 Mar 2010 07:35 AM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

Germany's Merck KGaA said Sunday that it will pay $6 billion in cash to buy U.S. biotech equipment maker Millipore Corp. in a move to expand its presence beyond drugs and chemicals and into the life science sector.

The deal ends more than a week of speculation over Millipore's future.

Shares of the Billerica, Mass., company soared last week after reports said lab instrument maker Thermo Fisher Scientific Inc. had made a $6 billion offer. Millipore, which supplies tests and equipment to the biotechnology industry, then confirmed that it was evaluating strategic alternatives — including a possible sale. The company hired advisers Goldman Sachs and Cravath, Swaine & Moore LLP to help it consider its options.

Based on Millipore's 56.3 million shares outstanding at Dec. 31, Merck's $107-per-share offer is worth $6.03 billion. Including assumed debt, Merck values the deal at $7.2 billion.

"This transaction is very attractive to shareholders, customers and employees of both companies," Karl-Ludwig Kley, chairman of Merck's executive board, said in a statement. The company said the acquisition will be a strong strategic fit that allows it to expand the breadth of its business, and will create a $2.9 billion partnership in the life science sector.

Merck said that currently, its chemicals business generates around 25 percent of the company's total revenue. Following the transaction, the chemicals business will contribute 35 percent of sales.

Merck's offer marks a 50 percent premium to Millipore's $71.34 closing stock price on Feb. 19, the last trading day before takeover reports surfaced. The deal is expected to be completed in the second half of 2010.

Millipore, which has about 6,000 employees across more than 30 countries, generated sales of $1.65 billion in fiscal 2009. Merck said it will keep the company's headquarters in Billerica, combine it with Merck's U.S. chemicals headquarters and retain Millipore's senior management. Merck anticipates the combined business will create savings of $100 million (75 million euros) in the three years following the close of the deal.

Millipore shareholders still must approve the deal.

Merck, based in Darmstadt, last week reported 2009 earnings of 366 million euros ($498.7 million), nearly unchanged from 2008. The company, which makes the cancer drug Erbitux, multiple sclerosis treatment Rebif and also produces liquid crystal displays for televisions and computer monitors, said revenue rose 2 percent to 7.8 billion euros ($10.63 billion).

Merck said it will fund the deal with available cash and a term loan provided by Bank of America Merrill Lynch, BNP Paribas and Commerzbank. Merck plans to replace part of the facility by issuing bonds.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Franciscan Order Faces Financial Hardship

Tuesday, 23 Dec 2014 12:34 PM

The financial difficulties have transpired despite the order possessing an illustrious patrimony that includes custody o . . .

Pope Instrumental in Cuba Negotiations

Thursday, 18 Dec 2014 14:12 PM

Pope Francis is being widely credited for helping to restore diplomatic and economic ties between the U.S. and Cuba, but . . .

Concern Grows Over Liberal German Church Influence

Monday, 15 Dec 2014 12:38 PM

The Teutonic juggernaut influencing the church is powerful and likely to continue. . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved