Merck buys Millipore Corp for $6 billion

Merck, world’s largest maker of chemicals for flat-panel displays, said it agreed to acquire Millipore for $107 per share in cash, valuing the deal at around $7.2 billion including net debt.

The deal snatches Millipore away from rival bidder Thermo Fischer Scientific Inc. A source told Reuters that Thermo Fisher offered to buy Millipore for $6 billion, but the exact terms of that bid were unknown.

Merck’s bid represents a 13 per cent premium over Friday’s closing price for Millipore shares, which had already been boosted by recent takeover speculation. In a statement, Merck said the tie-up would create a supplier of equipment and substances for research to the life science sector with 2.1 billion euros ($2.7 billion) in annual sales. Millipore, which makes filters and purifiers for laboratory water and other materials used in making biotechnology drugs, had revenue of $1.65 billion, or 1.21 billion euros, last year.

Merck said the deal will create about $100 million of annual cost savings, which it expects to reach within three years of closing. Merck said it expects the transaction to clear regulatory review and be completed in the second half of 2010.

To finance the Millipore deal, Merck will use cash it holds on its balance sheet and will take out bridge loans, which at a later stage will be replaced by a bond issue, a spokeswoman said.

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