Germany's Merck to buy US firm Sigma-Aldrich for USD 17 bn

German drug maker Merck KGaA will acquire US-based Sigma-Aldrich, led by Indian-origin CEO Rakesh Sachdev, for USD 17 billion in an all cash deal.
"Merck KGaA, Darmstadt, Germany, will acquire all of the outstanding shares of Sigma-Aldrich for USD 140 per share in cash. The agreed price represents a 37 per cent premium to the latest closing price of USD 102.37 on September 19...," Sigma-Aldrich said in a statement today.
"The transaction is expected to be immediately accretive to Merck KGaA, Darmstadt, Germany's EPS pre and EBITDA margin," it added.
Merck KGaA expects to achieve annual synergies of around USD 340 million, which should be fully realised within three years after closing.

"This transaction marks a milestone on our transformation journey aimed at turning our three businesses into sustainable growth platforms. For our life science business it's even more than that: it's a quantum leap," said said Karl-Ludwig Kley, Chairman of Merck KGaA, Darmstadt, Germany's Executive Board.
Rakesh Sachdev, President and Chief Executive Officer of Sigma-Aldrich said,"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 organization."

The combined company will be able to serve life science customers around the world with a highly attractive set of established brands and an efficient supply chain that can support the delivery of more than 300,000 products, Sigma-Aldrich said in the statement.

Shaped over almost 350 years by a family of owners, Merck today is known as a successful and values-driven business and a well-respected employer in the life science industry.
Based on fiscal year 2013 financials, the business would have had combined sales of USD 6.1 billion.