Drug maker Merck to buy Swiss Serono for $13.5 bn
Merck KGaA, the German drug maker that lost a bid for rival Schering AG this year, agreed to buy Switzerland’s Serono SA for €10.6 billion ($13.5 billion) to become Europe’s largest biotechnology company.
Merck agreed to buy billionaire Ernesto Bertarelli’s stake in the company and make a public offer for the rest, the Darmstadt, German-based company said in a statement to the stock exchange on Thursday.
Merck lost Schering to Bayer AG in March, and is now targeting a drugmaker that’s struggled to develop new products and reduce its reliance on the market for multiple sclerosis medicines.
Bertarelli had been seeking a buyer for Serono for almost a year and the company’s best-selling Rebif drug will allows the German drugmaker to enter a new medical field.
Suitors including GlaxoSmithKline Plc and Novartis AG walked away from Serono earlier this year. Bertarelli, 40, has sought to sell as he organises a defence of his 2003 victory in the America’s Cup yacht race. Merck, which sells the Erbitux cancer drug outside the US, said the plan includes a capital increase worth between €2 billion and €2.5 billion.
The company is seeking pharmaceutical acquisitions because it regards its drugs unit as too small to compete in the $550 billion market.
Buying Serono would add almost €2 billion to Merck’s annual pharmaceutical sales, bringing it closer to Boehringer Ingelheim, Germany’s second-biggest drugmaker.
Merck had said it wouldn’t give up its search for acquisitions after losing Schering to Bayer in March. Targets included companies that would add 1 billion euros in research and development funding and global presence, CFO Michael Becker said in April. In June, the need for a partner become more pressing as the company abandoned its most advanced product in development, Sarizotan, a medicine to treat Parkinson’s disease. Analysts had estimated the drug would garner annual sales of at least €250 million.
In July, Merck said second-quarter profit more than doubled, buoyed by the sale of Schering stock amassed in its attempt to take it over.
Merck isn’t affiliated to the US drugmaker Merck & Co. The Germany company is the world’s third-largest maker of generic drugs and controls around 70% of the world market for liquid crystals, chemicals used to make flat-screen televisions and monitors.
In July, Serono said second-quarter profit rose 8% on increased demand for Rebif, its best-selling product. Revenue from Rebif rose 11% to $362 million.
—Bloomberg
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