Merck KGaA to acquire Millipore

Published: 1-Mar-2010

Merck KGaA has agreed to acquire US-based Millipore

Merck KGaA has agreed to acquire US-based Millipore, a provider of technologies, tools and services for bioscience research and biopharmaceutical manufacturing, for Euro 5.3bn (US$7.2bn). The transaction was approved by the boards of directors of both companies.

The deal will create a €2.1bn ($ 2.9bn) world-class player with significant scale in high-margin speciality products with an attractive growth profile.

"This is a combination with an excellent strategic fit, which will allow us to cover the entire value chain for our pharma and biopharma customers, offering integrated solutions beyond chemicals," said Dr Karl-Ludwig Kley, chairman of the executive board of Merck.

"By 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 for Merck. Through this acquisition, we will expand the overall product offering of the Merck Group, using the well-recognised Millipore brand in addition to our own brand."

The transaction will lead to a more balanced business profile for Merck KGaA. Currently, the chemicals business sector generates around 25% of the group's total revenues. Following the transaction, the chemicals business will contribute 35% of total revenues of €8.9bn ($ bn).

Millipore has a strong position in the attractive bioresearch and bioproduction segments, offering a comprehensive range of products, technologies and services for pharma and biotech companies, as well as for academia, to improve laboratory productivity and to develop and optimise manufacturing processes. In 2009, Millipore generated sales of US$1.7bn (b bn), with around 6,000 employees in more than 30 countries.

"Over the past five years, we have transformed Millipore into a life science leader by driving innovation, entering new markets and generating exceptional operational performance," said Martin Madaus, chairman, president and ceo of Millipore. "We are excited to join a high-quality company like Merck as we will gain greater scale and scope in the life science industry. This is a very positive outcome as we continue to build on our strategy for growth, while maintaining our headquarters in Billerica."

Merck will apply a "best of both worlds" integration approach across all operating business functions. Merck plans to build on Millipore's workforce and intends to retain its senior management. The company also plans to maintain Millipore's headquarters in Billerica, Massachusetts, and combine it with Merck's US chemicals headquarters. Merck expects that the combined business will generate annual cost synergies of around $100m (b75m), which Merck expects to realise within three years from the closing of the transaction.

Subject to the approval of Millipore shareholders and the satisfaction of other customary conditions, including antitrust clearance, the transaction will be completed in the second half of 2010.

You may also like