German pharmaceutical company Merck KGaA will buy U.S. biotech equipment maker Millipore Corp. in a deal valued at $7.2 billion including debt, according to media reports Sunday.
Speculation about an acquisition of the life sciences company, which supplies tests and equipment to the biotechnology industry, has swirled since reports last week said lab instrument maker Thermo Fisher Scientific Inc. offered $6 billion for Millipore.
Millipore, based in Billerica, Massachusetts, confirmed last week that it was evaluating strategic alternatives — including a possible sale. The company hired Goldman Sachs to act as a financial adviser and Cravath, Swaine & Moore LLP as a legal adviser to help it consider its options.
On Sunday Merck announced that it would pay $107 per share in cash for Millipore and expects the deal will be completed in the second half of 2010, the paper reported. Based on Millipore's 56 million shares outstanding, the acquisition would be valued at $5.99 billion before assumed debt.
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The purported share price would mark a 50 percent premium to Millipore's $71.34 closing stock price on Feb. 19, the last trading day before takeover reports surfaced.
For fiscal 2009, Millipore reported profit of $177 million on revenue of $1.65 billion. Merck, based in Darmstadt, last week reported 2009 earnings of euro366 million ($498.7 million), nearly unchanged from 2008. Revenue for 2009 was 2 percent higher at euro7.8 billion ($10.63 billion). The company also issued a weak outlook and lowered its dividend.
Merck makes the cancer drug Erbitux and multiple sclerosis treatment Rebif and also produces liquid crystal displays for televisions and computer monitors.