Merck KGaA invests in bioresearch and bioproduction
pharmafile | March 1, 2010 | News story | Manufacturing and Production, Research and Development | Biochemistry, Merck KGaA, Merck Serono, Millipore, laboratory services
Merck KGaA has bought US life sciences company Millipore Corporation in a $7.2 billion deal to expand its chemicals business.
Millipore has 6,000 employees in more than 30 countries and its strengths lie in bioresearch and bioproduction, both areas Merck sees as high-growth and high-margin.
Much of its work is in helping to improve laboratory productivity – for example, last year Millipore introduced a single-use benchtop bioreactor that is ready for use ‘out of the box’.
The advantages of the deal – primarily greater scale and scope in life sciences for Millipore, and an improved chemicals business for Merck – include annual cost savings of around $100 million.
“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,” says Merck chairman Karl-Ludwig Kley.
Currently Merck’s chemicals business generates a quarter of group revenue, but the manufacturer says this will grow to 35% following the acquisition.
Last year Millipore had sales of $1.7 billion and the combination will create a $2.9 billion business to “transform Merck Chemicals”.
Merck, based in Darmstadt, Germany, has bought all the company common stock paying $107 per share in the deal.
“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,” added Kley.
Despite their emphasis on cost “synergies”, the companies have pledged that Millipore will maintain its HQ in Billerica, Massachusetts, and combine it with Merck’s US chemicals HQ.
Millipore chief executive Martin Madaus insisted: “This is a very positive outcome for our employees and customers.”
“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,” he continued.
The deal is expected to go through after June this year.
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