German pharmaceutical firm Merck has announced a deal to buy US specialty chemicals maker Sigma-Aldrich in a bid to expand its life science business. The acquisition is Merck's biggest ever.
Merck said Monday that the acquisition of Sigma-Aldrich would cost the company $17 billion (13.1 billion euros), and was aimed at making the German drug maker "one of the leading players in the $130 billion global life science industry."
In a statement, Darmstadt-based Merck said it offered to pay Sigma-Aldrich shareholder $140 per share in hopes to garner annual synergies from the purchase of about 260 million euros within three years.
"The combined company will be able to serve life science customers around the world with a highly attractive set of established brands and an efficient supply chain that can support the delivery of more than 300,000 products," it added.
Sigma-Aldrich Chief Executive Rakesh Sachdev said in a statement the deal was a "very positive outcome" for shareholders due to the price premium. Moreover, employees would benefit from "enhanced opportunities as part of a larger, more global organization."
Merck already acquired another US equipment maker, Millipore, in 2010. The purchase of Sigma-Aldrich is expected to double the Germans' life science business to a total of 4.7 billion euros, narrowing the gap to market leader Thermo Fisher Scientific. The acquisition is Merck's biggest in the company's history, following its 10.3-billion-euro takeover of Swiss biotech company Serono a few years ago.
Sigma-Aldrich shares were surging more than 30 percent on the announcement Monday, reaching about $137 per share. Merck shares also shot up, trading almost 9 percent higher at about 75 euros.
uhe/ (Reuters, AP, AFP)