Merck to Acquire Sigma-Aldrich in $17B Transaction

Merck has entered into a definitive agreement to acquire Sigma-Aldrich for $17.0 billion. The combined company will serve life science customers globally with established brands and a supply chain that can support the delivery of more than 300,000 products.
 
The Lab & Academia business will include Merck Millipore and Sigma-Aldrich’s range of products across lab chemicals, biologics and reagents. In pharma and biopharma production, Sigma-Aldrich expands Merck’s products and capabilities with additions along drug production and validation.
 
Merck plans to maintain a significant presence in St. Louis and Billerica, following completion of the transaction, as well as important Merck Millipore sites including Darmstadt and Molsheim, France. An integration team with representatives from both companies will be established to oversee and facilitate the integration process.
 
Based on fiscal year 2013 financials, the combined life science business would have combined sales of $6.1 billion, an increase of 79%. Merck Group’s sales would have increased by approximately 19%. The transaction is expected to close mid-year 2015, subject to regulatory approvals and other customary closing conditions.
 
“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. “The combination of Merck and Sigma-Aldrich will secure stable growth and profitability in an industry that is driven by trends such as the globalization 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 organization.”
 
Guggenheim Securities and J.P. Morgan are acting as financial advisers to Merck, and Skadden, Arps, Slate, Meagher & Flom LLP as its legal adviser. Morgan Stanley & Co. LLC is acting as financial adviser to Sigma-Aldrich and Sidley Austin LLP is acting as legal adviser.