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2006-09-21 News Release
Pharmaceuticals business
ensures future
A major player in the global pharmaceuticals market to create a Biopharmaceuticals
leader with a top position in the world of biologic medicines.
Merck KGaA announces that it has entered into an agreement with the Bertarelli
Family, which owns the majority stake of Serono SA, to purchase their
Serono shares to create a strategically compelling combination with the
size to compete in the global pharmaceutical market.
Find
Information and Suppliers of biologic medicines.
Subject to antitrust review and closing of the purchase, Merck holds 64.5%
of the capital of Serono and 75.5% of the voting rights, for which Merck
agreed to pay CHF 1,100 per share in cash. Merck will make a public tender
offer under Swiss law for the same price of CHF 1,100 per share. The offer
price represents a 20% premium to the share price as of September 20,
2006, and a total equity value of CHF 16.6 billion (approximately EUR
10.6 billion) on a fully diluted basis.
“This acquisition transforms Merck’s Pharmaceuticals business
and creates a leading position in the world of biologic medicines, which
helps to ensure its future through the 21st century,” said Michael
Roemer, Chairman of the Executive Board of Merck KGaA. “Both companies
have a unique opportunity to achieve a competitive advantage through a
combined EUR 1 billion R&D budget and a stronger product portfolio.
The companies are a perfect fit with 28 compounds in development. Together
with Serono management and employees, we will create a world-class biopharmaceutical
company with global footprint, cutting-edge biotechnology manufacturing
and strong growth.”
Ernesto Bertarelli said: “With this transaction we create a combined
business with strong capabilities, especially in neurology and oncology.
Together with Serono SA , Merck will be a world-class biotechnology company
and a major player in the global pharmaceutical market. This match will
allow Serono’s innovative biotech abilities to play an important
role in the future of the combined company while expanding its global
reach.”
Strategic Rationale
Together with Serono, Merck achieves:
- Critical mass in R&D with an annual budget of approximately EUR
1 billion
- R&D capabilities greater than the sum of the parts
- Market-leading Multiple Sclerosis franchise to broaden business portfolio
- Expanded geographic reach and access to the U.S. market
- World-class biotechnology manufacturing
Merck’s Pharma Ethicals division will be combined with Serono to
create “Merck-Serono Biopharmaceuticals.” The headquarters
of this business will be in Geneva, Switzerland. Merck-Serono Biopharmaceuticals’
U.S. headquarters will be in Boston, MA. Based on 2005 figures, the new
Merck Group would have pro-forma sales of EUR 7.7 billion, including EUR
3.6 billion in biopharmaceutical sales. The Merck Group will have a total
number of about 35,000 employees. Merck's successful business model of
competing in both pharmaceuticals and chemicals will remain in place and
be strengthened by this combination.
The offer is subject to the customary conditions, including the receipt
of antitrust clearances and the closing of the transaction with the Bertarelli
family. Full details of the conditions will be disclosed in the offer
document. The transaction is expected to close in early 2007. The offer
will not be made to, and Serono shares will not be accepted from, holders
of Serono shares in the United States and no offer will be made for Serono
ADRs/ADSs. This communication is not an extension of the offer in the
United States.
Find more information about Merck KGaA
Read a recent press release about - DSM Pharmaceutical Products announces
the sale of the assets and business of their pharmaceuticals production
site in South Haven, Michigan.
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