Zacks_Analysts' Blog : Millipore Acquisition on Track - Analyst Blog

Merck KGaA’s acquisition of Millipore Corporation (MIL) remains on track with Millipore recently announcing that its shareholders have voted in favor of the acquisition. The company said that about 79% of outstanding shares voted, of which approximately 98% were in favor of the acquisition.



The acquisition agreement was announced in late Feb 2010. According to the agreement, Merck KGaA will acquire all outstanding shares of common stock of Millipore for $107 per share in cash, or a total transaction value, including net debt, of approximately €5.3 billion ($7.2 billion).



Millipore and Merck KGaA will create a €2.1 billion ($2.9 billion) partnership in the life science sector, achieving significant scale in high-margin specialty products with an attractive growth profile. This acquisition will help the combined company strengthen its presence in high-growth areas and expand its geographical presence.

 

Following the acquisition, contribution from Merck KGaA’s chemicals business is expected to increase to 35% of total group pro forma revenues of €8.9 billion. The business currently accounts for 25% of total revenues. The combined business is expected to generate cost synergies of $100 million (€75 million) annually. Merck KGaA expects to realize these synergies within three years of closing of the deal.



The acquisition is scheduled to close early in the third quarter of 2010.



We currently have a Neutral recommendation on Millipore. Millipore’s business model ensures that its performance is not severely hampered by economic turbulence. The company’s business is well diversified across end-markets, product lines, and geographies -- this helps maintain growth even in challenging economic scenarios.
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