Hypo-thermia

8 May 2006 By Rob Cox Follow @rob1cox

Given that Fisher is nearly 50% bigger than its buyer, and Thermo s management gets to take over, the 7% premium on offer seems cheap. Moreover, Fisher s managers had their own incentives to sell. Despite these issues it looks the deal will pay off for Fisher shareholders.

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Fisher Scientific agreed to sell out to smaller scientific and lab equipment supplier rival Thermo Electron for $10.6bn in stock. Fisher shareholders will receive 2 Thermo shares, offering a premium of 7% based on Friday's closing prices.

Thermo's chief Marijn E. Dekkers will become head of the combined group. Fisher's chairman and chief executive Paul Montrone will step aside.

The companies said they are targeting $150m in cost savings within three years from the deal, and $50m in revenue enhancements.

Goldman Sachs and Lazard advised Fisher. Lehman and Rothschild advised Thermo.

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