Merck (IW 500/31) announced Monday it was buying antibiotics maker Cubist Pharmaceuticals for about $9.5 billion.
The equity value of the deal stands at around $8.4 billion, with $1.1 billion in debt.
Cubist focuses on treating superbugs, bacteria resistant to currently available drugs, including antibiotics.
The Massachusetts-based company, founded in 1992, posted a little over $1 billion in revenue last year.
Cubist has several treatments to fight pneumonia and intestinal troubles currently undergoing Phase 3 testing, the last stage before getting approved to put it on the market.
"Cubist is a global leader in antibiotics and has built a strong portfolio of both marketed and late-stage pipeline medicines," Merck CEO Kenneth Frazier said.
"Combining this expertise with Merck's strong capabilities and global reach will enable us to create a stronger position in hospital acute care while addressing critical areas of unmet medical need, such as antibiotic resistance."
Although the acquisition is significant, it should be absorbed easily by Merck, which has market capitalization of $175 billion.
Merck is buying Cubist for $102 per share in cash, a 35% premium compared to the company's stock price for the most recent five trading days.
Copyright Agence France-Presse, 2014
