German-based Merck KGaA will be acquiring the chemical company, Sigma-Aldrich, for $140 per share which is a premium of 37 percent over the latter's closing price last September 19. The takeover amounted to $17 billion with the aim to expand the business in chemicals.
Merck's acquisition of Sigma-Aldrics aims to aid in the former's goal to shift its business from dependence on drug development and instead expand in chemicals used in research labs and pharmaceutical manufacturing.
Merck's share price jumped the most in six years following the announcement on the proposed acquisition. The company rose 9.4 percent, the biggest intraday gain since more than 5 years ago placing the company value at 31.8 billion euros. Shares of Sigma-Aldrich also rose by 34 percent.
Sigma-Aldrich is a life science and technology company and whose chemical and biochemical products are used for scientific research, pharmaceutical development, biotechnology, and in the diagnosis of disease. The company has made several acquisitions over the years and now they will be bought out by German group Merck. Sigma-Aldrich currently operates in 40 countries.
Merck KGaA is a German-based chemical and pharmaceutical company. Founded in 1668, the company is the oldest operating chemical and pharmaceutical company in the world. The Merck family currently owns approximately 70 percent of the company's shares, after the company went public in 1995. Before that, the company was considered privately owned.
Merck has previously acquired several companies including Switzerland's largest biotech firm Sereno SA last September 2006, chemical company Millipore Corporation last 2010, and AZ Electronic Materials SA who offers specialty chemicals to the electronics industry last 2013.
Merck's focus on their pharmaceutical research and development is on oncology and cardio-metabolic care. In their chemicals business, they are currently the largest producer of liquid crystals used for flat screen TVs and monitors. One of their divisions, Merck Millipore, is focusing on bioscience, lab solutions and process solutions.
