Merck to Acquire Sigma-Aldrich to Enhance Position in Attractive Life Science Industry

Merck and Sigma-Aldrich have entered into a definitive agreement under which Merck will acquire Sigma-Aldrich for $17.0 billion (€13.1 billion), establishing one of the leading players in the $130 billion global life science industry.

Merck will acquire all of the outstanding shares of Sigma-Aldrich for $140 per share in cash. The agreed price represents a 37% premium to the latest closing price of $102.37 on 19 September 2014, and a 36% premium to the one-month average closing price. The transaction is expected to be immediately accretive to Merck’s EPS pre and EBITDA margin. Merck expects to achieve annual synergies of approximately €260 million (approximately $340 million), which should be fully realised within 3 years after closing.

“This transaction marks a milestone on our transformation journey aimed at turning our three businesses into sustainable growth platforms”, said Karl-Ludwig Kley, Chairman of Merck’s Executive Board. “For our life science business it’s even more than that: it’s a quantum leap. In one of the world’s key industries two companies that fit perfectly together have found each other to present a much broader product offering to our global customers in research, pharma and biopharma manufacturing and diagnostic and testing labs. As such, the combination of Merck and Sigma-Aldrich will secure stable growth and profitability in an industry that is driven by trends such as the globalisation of research and manufacturing. What’s more, the combination gives us the possibility to invest even more in innovation going forward. We are delighted to make this compelling proposition to Sigma-Aldrich’s shareholders, who will obtain full and certain cash value for their shares.”

Rakesh Sachdev, President and Chief Executive Officer of Sigma-Aldrich, said, “We are excited to join forces with Merck, a distinguished industry leader. 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. This transaction is a clear validation of our success in transforming Sigma-Aldrich into a customer-focused and solutions-oriented global organisation. This is a testament to the strength of the Sigma-Aldrich brand and the accomplishments of our 9,000 employees worldwide. We believe this is a very positive outcome for our shareholders, who will receive a significant premium, and our employees, who will benefit from enhanced opportunities as part of a larger, more global organisation.”