Jul 15 2010
Merck KGaA, a global pharmaceutical and chemical company, today announced the successful completion of its acquisition of Millipore Corporation (formerly NYSE: MIL), a leading Life Science company based in Billerica, Massachusetts, USA, for an aggregate purchase price including debt and cash of approximately $7.0 billion.
Merck agreed to acquire Millipore on February 28, 2010 for $107 in cash per share of Millipore common stock. The closing follows the approval of the acquisition by Millipore’s shareholders at a special meeting held on June 3, 2010 and the satisfaction of other customary conditions, including antitrust clearance in the United States and Europe. Merck will now begin the process of delisting the shares of Millipore from the New York Stock Exchange and removing the shares from registration with the U.S. Securities and Exchange Commission.
“With today’s launch of EMD Millipore, we are creating a world-class partner for the Life Science sector, with a comprehensive product offering and enhanced global scale and innovative power,” said Dr. Karl-Ludwig Kley, Chairman of the Merck Executive Board. “We will now move quickly to bring together the expertise and complementary capabilities of both Merck and Millipore employees to capture the significant opportunities in the high-growth, high-margin market segments such as bio-research and bio-production.”
With the close of the transaction, Dr. Bernd Reckmann will assume the role of Head of the EMD Millipore division. Dr. Reckmann joined Merck in 1986 working in the diagnostics research unit. He has held several senior management positions during his tenure and previously served as President of the Merck Companies in Korea. In 2007, he was appointed to the Executive Board of Merck and as a General Partner. Dr. Reckmann will continue to serve as Head of Merck’s Chemicals Business Sector, overseeing both the EMD Millipore and Performance Materials divisions, and as a member of the Executive Board.
“Both Merck and Millipore have a long and proud history of providing superior products and solutions to their partners in the Life Science sector,” said Dr. Reckmann. “The increased breadth of the EMD Millipore product portfolio, together with the expertise of our talented people, will allow us to deepen our customer relationships and gain the new insights we need to further drive innovation. We will also bring together our research and development capabilities, which will make EMD Millipore one of the top three investors in R&D in the Life Science Tools industry. This, in turn, will enable us to create greater value for our customers.”
Dr. Reckmann added, “Our vision for EMD Millipore is simple: we want to be the most sought-after company in the world for advanced life science solutions. We will foster intimacy and trust with our customers and business partners, and be recognized for excellence in all that we do. I am confident in our ability to achieve this vision given our complementary strengths and our commitment to our customers and our communities. I am looking forward to getting started and working alongside such a talented team.”
With 10,000 employees in 64 countries, EMD Millipore (Merck Millipore outside U.S. and Canada) had pro forma revenues of $2.9 billion for fiscal year 2009. It will be headquartered in Billerica, Massachusetts, and supported by locations throughout the Americas, Europe and Asia-Pacific. The new division will offer a comprehensive range of products, technologies and services for pharma and biotech companies, as well as for academia, to improve laboratory productivity and develop and optimize manufacturing processes. EMD Millipore will have enhanced global manufacturing and distribution capabilities, which will allow it to compete more effectively in the marketplace. Additionally, a larger sales organization will lead to greater customer service and broader global sales coverage, opening up new growth opportunities.
EMD Millipore will consist of three business units – Bioscience, Lab Solutions and Process Solutions – and each unit will itself comprise a number of key focus areas, known as business fields.
Integration planning progressing well: senior management team appointed
To ensure a swift and smooth integration, EMD Millipore has made significant progress on the integration planning process and has appointed the senior management team.
Following Merck’s “best-of-both-worlds” integration approach across all operating business functions, the leaders for EMD Millipore are drawn from both companies: Jon DiVincenzo (currently President of Millipore’s Bioscience Division) will head up the Bioscience Business Unit; Klaus R. Bischoff (currently President of the Merck’s Performance & Life Science Chemicals Division) will lead the Lab Solutions Business Unit; Jean-Paul Mangeolle (currently President of Millipore’s Bioprocess Division) will be the new head of the Process Solutions Business Unit; and Peter C. Kershaw (currently Corporate Vice President of Global Operations at Millipore) will head Operations.
Martin Madaus, CEO of Millipore, will not be joining EMD Millipore but will be available as an advisor during the integration process. Charles Wagner, the CFO of Millipore, and Bruce Bonnevier, Corporate Vice President for Human Resources at Millipore, will leave the company. Joerg Hornstein, Chief Financial Officer for Merck Serono in China, has been appointed as the new Head of Controlling for EMD Millipore; Toni Spinazzola, Vice President for Human Resources at Millipore, will become Head of Human Resources for EMD Millipore.
Merck expects that the majority of the integration decisions will be made by the end of 2010. As already announced, Merck expects the combined business to generate annual cost synergies of around $100 million, which Merck expects to realize within three years from the closing of the transaction.
New Performance Materials division created
The second Chemicals division of Merck, Performance Materials, will be led by Walter Galinat, currently head of the Liquid Crystals division. It will comprise Merck’s current Materials businesses and activities - i.e. Liquid Crystals, Pigments and Cosmetics businesses.
The launch of Performance Materials will combine Merck’s successful range of materials-based products, technologies and innovative solutions as well as its application know-how and customer-centric research to create an even more compelling customer offering and open up additional growth opportunities. The division will be able to more effectively address current and future megatrends through R&D focused on future demand drivers and a broad portfolio of innovative solutions and common customer engagement.
Mr. Galinat said, “The integration of our specialty chemicals materials businesses in Performance Materials allows Merck to merge innovative chemical research and development, strong application know-how, excellent product solutions and distinctive customer focus in promising growth areas.” The division had pro forma sales of more than $1.6 billion for fiscal year 2009, with approximately 5,000 employees worldwide.