German pharmaceutical company Merck KGaA, on March 1, hailed its takeover of Millipore, a U.S. biotechnology firm, with Merck chief executive Karl-Ludwig Kley saying he felt as though he had won a gold medal.
Merck will pay $7.2 billion for Millipore, which is based near Boston, as "a very important step for the strategic reorientation of our chemical business," said Kley. "It is almost perfectly in line with Merck's acquisition criteria. If we could win a gold medal we would have won it," Kley said.
He did not give details on how the expensive deal would be funded, saying only that part would come from Merck's cash pile and some from a syndicated loans from U.S. and European banks. The group hoped to quickly begin repaying the loan with the proceeds of a future bond issue, Kley said. Under an agreement reached by the two sides, Merck KGaA will acquire all outstanding shares of common stock of Millipore for $107 per share in cash.
Last year, Millipore generated $1.7 billion in sales. It has around 6,000 employees in more than 30 countries of the world.
Merck expects the combined business will generate annual cost savings of around $100 million, and assumed total integration costs of $150 million in 2010-2011. The two companies had combined sales last year of 8.9 billion euros.
"Our geographical reach will be extended in the world and especially our presence in the U.S. will be enhanced," Kley said, noting that the United States remained the world's biggest pharmaceuticals and chemicals market. "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," he added.
Copyright Agence France-Presse, 2010