MOSCOW (MRC) -- German specialty chemicals and pharmaceuticals firm Merck KGaA has entered into a definitive agreement to buy US-headquartered fine chemicals life science and technology company Sigma-Aldrich for USD17.0bn, said Bloomberg.
Merck will acquire all of the outstanding shares of Sigma-Aldrich for USD140 per share in cash. The agreed price represents a 37% premium to the latest closing price of USD102.37 and a 36% premium to the one-month average closing price.
Merck expects the transaction to be immediately accretive to its earnings per share (EPS) pre and earnings before interest, tax, depreciation and amortisation (EBITDA) margin. It also expects to achieve annual savings of approximately USD340m, which should be fully realised within three years after closing the deal. Closing is expected in mid-year 2015, subject to regulatory approvals.
The transaction has been unanimously approved by Sigma-Aldrich’s board of directors and a merger agreement will be presented to the company’s shareholders for approval. The deal has the full support of Merck’s executive board and a shareholder vote will not be required.
Rakesh Sachdev, president and CEO of Sigma-Aldrich, said: "The combined company will be well-positioned to deliver significant customer benefits, including a broader, complementary range of products and capabilities, greater investment in breakthrough innovations, enhanced customer service, and a leading e-commerce and distribution platform in the industry."
Merck plans to maintain a significant presence in St Louis, and in Billerica, the US, following completion of the transaction, as well as in Merck Millipore sites such as Darmstadt, Germany and Molsheim, France.
The two companies said, based on fiscal year 2013 financials, the combined life science business would have had sales of USD6.1bn, an increase of 79%, and combined EBITDA before one-time items of USD2.0bn, which is 139% higher.
As MRC wrote before, by acquiring a majority stake in InnovationLab GmbH, Merck and BASF, the world's largest petrochemical producer, are increasing their involvement in order to continue the successful scientific work of the Heidelberg-based research and transfer platform for organic electronics in the Rhine-Neckar metropolitan region.
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