German drugmaker Merck on Thursday agreed to buy a 64.5 percent stake in rival Serono, valuing the Swiss firm at 16.1 billion Swiss francs ($12.86 billion) and creating a new European pharmaceutical heavyweight.
The deal gives Merck 75.5 percent of the voting rights in Serono.
Merck agreed to pay 1,100 francs per share for Serono, representing a 29 percent premium to the average Serono price for the 30 days prior to the deal, which was announced by the companies.
The surprise deal will cost Merck about $8.3 billion and will create a drug group with a combined market value of around $32 billion, annual sales of almost 8 billion euros and a research budget of around 1 billion euros.
Merck said it would need to raise capital to finance the bid.
The deal represents a dramatic strategic reversal by Serono's controlling owners, the Bertarelli family. Serono was in the process of seeking takeover targets after earlier abandoning attempts to find a buyer for itself.
Merck KGaA, the family-controlled drugmaker that lost a bid for Schering AG this year, agreed to purchase billionaire Ernesto Bertarelli's stake in Serono SA and take control of Europe's largest biotechnology company. Bertarelli had been trying to sell Serono after suitors including GlaxoSmithKline Plc and Novartis AG walked away earlier this year. The chief executive, 40, is organizing a defense of his 2003 victory in the America's Cup yacht race.
Source: CNN
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