Merck KGaA and Millipore Join Forces
Global pharmaceutical and chemical company Merck KGaA headquartered in Darmstadt, Germany will acquire Millipore Corporation, a leading Life Science company based in Billerica, USA for approximately € 5.3 billion to create a € 2.1 billion world-class partner for the Life Science sector. Right after the announcement on February 28, G.I.T. Laboratory Journal Europe had the chance to talk to Dr. Karl-Ludwig Kley, Chairman of the Executive Board of Merck and Dr. Walter Huber, Head of Corporate Communications about the transaction and the strategic fit of both companies.
The chemical business generates about one quarter of Merck's revenue at the moment. How much is this supposed to be after the acquisition?
Following the transaction our chemicals business sector will generate about 35% of total Group pro forma revenues of € 8.9 billion. The main drivers will be Liquid Crystals and the new Life Science business.
Does this indicate a general shift from Chemistry to Life Science - maybe also by further biotech acquisitions in the near future?
Merck is a hybrid of pharmaceuticals and chemicals and always will be. This is in our genes. The agreement has just been signed and the first goal for both companies is to drive this new business forward. At this point, it is too early to talk about our future strategies in detail.
How will Millipore be integrated? I guess you are going to keep the strong Millipore brand?
Millipore is a great company with a very high performance over the last years and a strong position in the attractive bioresearch and bioproduction segments. We not only plan to use the well-recognized Millipore brand but also look forward to working together with its strong senior management and talented workforce.
Will you continue all Millipore product lines or are you planning to focus on specialty products?
The portfolios of Merck and Millipore are very complementary and highly specialized. The combination of Millipore's bioscience and bioprocess knowledge with our own expertise in serving pharma customers is an excellent strategic fit, which will allow us to cover the entire value chain for our pharma and biopharma customers.
Does the acquisition also have a positive effect on your geographic presence?
Together, Millipore and Merck will not only have a significant presence in high-growth segments but also an enhanced geographic presence. It will strengthen our chemical business in the US and China. On the other hand, for example in India, Merck can help Millipore to strengthen its presence.
Talking of synergies and combined businesses, the question on cost-savings and also job cuts comes up.
We expect to save € 75 million per year by synergistic effects - e.g. by combining global general functions, but at this stage it is too early to say what this means in detail. We will maintain Millipore's headquarters in Billerica and intend to retain its skilled senior management, as I mentioned before. In general I would like to stress that this is not a merger for cost savings but for growth.
Dr. Kley and Dr. Huber, thank you very much for this interview opportunity. We look forward to a follow up after the closing of this deal in about three month to give our readers more details on Merck's future strategy and the new integrated solutions you will be offering your customers.