A millipore for growth

1 March 2010 By Una Galani Follow @ugalani

The German chemicals and drugs maker will pay $7.2 billion to beef up the chemicals side with U.S.based Millipore. Shareholders, who just took a big dividend cut, are now paying a high price for expansion. This looks like an expensive way to get a more balanced portfolio.

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Merck on Feb. 28 announced it agreed to buy U.S. biotech tool maker Millipore for around $7.2 billion including debt, offering $107 per share in cash.

The German chemicals and drugs maker said it expects the deal to create about $100 million of annual cost savings, which Merck expects to achieve within three years.

The deal is contingent on approval from Millipore shareholders and antitrust authorities. Merck expects the transaction to be completed in the second half of 2010.

Millipore confirmed on Feb. 23 that it was considering strategic alternatives, including a merger or sale of the company. U.S. rival Thermo Fisher had been interested in acquiring Millipore, according to multiple news reports.

Merck's bid represents a 13 percent premium to the Feb. 26 closing price of Millipore shares.

Context News

Merck on Feb. 28 announced it agreed to buy U.S. biotech tool maker Millipore for around $7.2 billion including debt, offering $107 per share in cash.

The German chemicals and drugs maker said it expects the deal to create about $100 million of annual cost savings, which Merck expects to achieve within three years.

The deal is contingent on approval from Millipore shareholders and antitrust authorities. Merck expects the transaction to be completed in the second half of 2010.

Merck's bid represents a 13 percent premium to the Feb. 26 closing price of Millipore shares.

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