Thermo Electron and Fisher Scientific to Merge

May 11, 2006
Pharmaceutical Technology Editors

ePT--the Electronic Newsletter of Pharmaceutical Technology

On May 8, Thermo Electron Corporation (Waltham, MA) and Fisher Scientific International Inc. (Hampton, NH) announced they would merge in a tax-free, stock-for-stock exchange.

On May 8, Thermo Electron Corporation (Waltham, MA,  www.thermo.com) andFisher Scientific International Inc. (Hampton, NH,  www.fisherscientific.com)announced they will merge in a tax-free, stock-for-stock exchange. Thenew $9-billion company will be named Thermo Fisher Scientific Inc. andwill provide  laboratory products and services for the life-,laboratory-, and health-sciences industries. The transaction isexpected to close in the fourth quarter of 2006.

Marijn E. Dekkers, president and chief executive officer of Thermo,will become president and chief executive officer of the combinedcompany, and Paul M. Meister, vice-chairman of the board for Fisher,will become the combined company's chairman. Following the close of thetransaction, Fisher's Chairman and Chief Executive Officer Paul M.Montrone will step aside in favor of the new management team. He willremain an adviser to the new company. Jim P. Manzi, chairman ofThermo's board, will serve on the combined company's board, which willcomprise eight members: five nominated by Thermo and three nominated byFisher.

The companies expect the deal to generate $200 million in synergies andresult in accelerated revenue growth and a 20% compound annual growthrate in adjusted earnings per share over three years. In 2007, ThermoFisher Scientific is expected to generate $1 billion in cash flow onits $9 billion in revenues in 2007.

Under the terms of the agreement, Fisher shareholders will receive twoshares of Thermo common stock for each share of Fisher common stockthey own. Upon completion of the transaction, Thermo's shareholderswill own approximately 39% of the new company, and Fisher shareholderswill own approximately 61%. The transaction will be treated as areverse merger with Thermo as the acquirer.

Thermo Fisher Scientific will be headquartered in Waltham,Massachusetts and will retain Fisher's office in Hampton, NewHampshire. The merger is subject to customary closing conditions andmust be approved by the appropriate regulatory bodies and bothcompanies' shareholders.

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