Sigma-Aldrich (SIAL) to be Taken over by Merck KGaA

Shares of the Sigma-Aldrich Corp. (SIAL) were trading up +35.98 or +35.15 percent to $138.35 per share in Monday's premarket. The company announced early this morning that German company Merck KGaA would be acquiring the company in a deal worth approximately $17 billion. Sigma-Aldrich stock closed at $102.37 per share,

St. Louis, Missouri based Sigma-Aldrich Corporation is a multi-national life sciences and high technology company with operations in 37 countries focused on enhancing human health and safety.
The company manufactures and distributes over 230,000 chemicals, biochemical and other products to 1.4 million customers worldwide. The company employs 9,000 people and had sales of $2.7 billion last year.

Darmstadt, Germany based Merck KGaA was founded in 1668 making it the oldest chemical and pharmaceutical company in the world. The company was privately owned until 1995, but 70 percent of shares continue to be owned by the Merck family. The company mainly operates in Asia, Africa, Latin America and Oceania and operated under the EMD Chemicals brand in North America since Merck & Co. (MRK) retains the rights to the Merck name in the U.S. and Canada.

The deal announced this morning, will have Merck KGaA pay $140 in cash for all outstanding common shares of Sigma-Aldrich. The price is a +37 percent premium of Sigma-Aldrich's closing price on Friday and values the company at $17 billion.

The deal is expected to be immediately accretive to Merck KGaA's German earnings per share and EBITDA. Merck KGaA said it expects to attain annual synergies of about 260 million or approximately $340 million fully realized three years after the expected closing of the deal.

Karl Ludwig Kley, Chairman of Merck KGaA's Executive Board said in a press release, "This transaction marks a milestone on our transformation journey aimed at turning our three businesses into sustainable growth platforms. For our life science business it's even more than that: it's a quantum leap.

The deal, already approved of by the Sigma-Aldrich management, will significantly boost Merck KGaA's EMD Millipore laboratory supplies business, with the company maintaining a presence in St. Louis, MO and Billerica, MA.

President and Chief Executive Officer of Sigma-Aldrich, Rakesh Sachdev said, "This transaction is a clear validation of our success in transforming Sigma-Aldrich into a customer-focused and solutions-oriented global organization. This is a testament to the strength of the Sigma-Aldrich brand and the accomplishments of our 9,000 employees worldwide. We believe this is a very positive outcome for our shareholders, who will receive a significant premium, and our employees, who will benefit from enhanced opportunities as part of a larger, more global organization.

The transaction is expected to close by the middle of 2015 and is subject to regulatory approvals and other closing conditions. Sigma-Aldrich stock is already trading just shy of the takeover price and will probably continue trading in a narrow range until the deal is completed.

Other News About Sigma-Aldrich
Sigma-Aldrich, University of Michigan Medical School Establish CRISPR Core Lab Partnership
Company enters into agreement with U. of M. in gene editing partnership.
Company's certified lab components for test kits are now available in Canada.

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Published on Sep 22, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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