* Merck KGaA to acquire Millipore for $107 a share
* Merck deal worth around $6 bln excluding debt
* Merck KGaA will fund deal from own cash and debt
* Merck wins Millipore away from Thermo Fisher
(Adds details about synergies, updates deal value)
FRANKFURT, Feb 28 Germany's Merck KGaA
(MRCG.DE) on Sunday said it agreed to buy U.S. biotech tool
maker Millipore Corp MIL.N for around $6 billion in cash, as
the company looks to build its lab equipment business.
Merck, the world's largest maker of chemicals for
flat-panel displays, said late on Sunday it agreed to acquire
Millipore for $107 per share in cash, valuing the deal at
around $7.2 billion including net debt.
The deal snatches Millipore away from rival bidder Thermo
Fischer Scientific Inc (TMO.N). A source familiar with the
situation told Reuters on Feb. 22 that Thermo Fisher offered to
buy Millipore for $6 billion [ID:nN22198210], but the exact
terms of that bid were unknown.
Merck's bid represents a 13 percent premium over Friday's
closing price for Millipore shares, which had already been
boosted by recent takeover speculation.
In a statement, Merck said the tie-up would create a
supplier of equipment and substances for research to the life
science sector with 2.1 billion euros ($2.7 billion) in annual
sales. Millipore, which makes filters and purifiers for
laboratory water and other materials used in making
biotechnology drugs, had revenue of $1.65 billion, or 1.21
billion euros, last year.
Merck said the deal will create about $100 million of
annual cost savings, which it expects to reach within three
years of closing.
Merck said it expects the transaction to clear regulatory
review and be completed in the second half of 2010.
Family-controlled Merck, which traces its roots to a 17th
century pharmacy, has been a smaller player in the
biotech-research equipment market. It relies heavily on liquid
crystals, the key chemicals for TV flat screens, and on
multiple sclerosis drug Rebif and cancer drug Erbitux for
In 2006, it was trumped by national rival Bayer (BAYGn.DE)
in a takeover battle over German contraceptives specialist
Schering, but the following year it acquired Swiss biotech
company Serono for 10.3 billion euros.
To finance the Millipore deal, Merck will use cash it holds
on its balance sheet and will take out bridge loans, which at a
later stage will be replaced by a bond issue, a spokeswoman
Millipore had confirmed on Tuesday it was evaluating
strategic alternatives, including a merger or sale of the
Millipore shares hit an all-time high of $97.58 after
reports of Thermo Fisher's interest in buying the company. They
closed at $94.41 on the New York Stock Exchange on Friday.
Guggenheim Securities and Perella Weinberg Partners advised
Merck in the transaction, and Goldman Sachs & Co advised
(Reporting by Ludwig Burger and Marilyn Gerlach, Additional
reporting by Michael Erman in New York; Editing by Diane Craft)