Merck KGaA Agrees to Buy Millipore for $7.2 Billion

Merck KGaA (Darmstadt, Germany) agreed to acquire Millipore (Billerica, MA) for EUR 5.3 billion ($7.2 billion). The acquisition will improve Merck's position as a supplier to the biopharmaceuticals and life-science segments.

“This is a combination with an excellent strategic fit, which will allow us to cover the entire value chain for our pharma and biopharma customers, offering integrated solutions beyond chemicals,” said Karl-Ludwig Kley, chairman of the executive board of Merck KGaA, in a company press release. Millipore has product and service offerings for bioresearch and bioproduction applications for laboratory and manufacturing activities. Millipore's 2009 sales were $1.7 billion, and the company has approximately 6000 employees.

The board of directors of both companies approved the merger agreement. Merck plans to retain Millipore's senior management. Merck also plans to keep Millipore’s headquarters in Billerica, Massachusetts, and combine them with Merck’s US headquarters for chemicals. Merck expects to generate annual cost synergies of $100 million within three years of closing of the transaction. The transaction, which is subject to customary and regulatory closings, is expected to close during the second half of 2010.

Merck KGaA supplies the pharmaceutical and biotechnology industries through its chemicals business, which includes performance chemicals for pharmaceutical, biotechnology, and nonpharmaceutical applications. The company also includes pharmaceutical-biotechnology company Merck Serono and has a consumer-healthcare business. The chemicals business of Merck KGaA now generates roughly 25% of the company’s total revenues, and the company expects this level to increase to 35% after the acquisition of Millipore is completed.