Germany’s Merck KGaA has announced a counter bid to acquire Versum Materials for $5.9 billion in cash against U.S. rival Entegris’ $4 billion offer.
The company said it planned to buy Versum for $48 per share ($5.2 billion excluding debt), a 51.7% premium to Versum’s undisturbed share price, on January 25, 2019, the day prior to the Versum-Entegris merger announcement.
Furthermore, the all – cash proposal offers a certain value to shareholders of Versum and does not expose them to integration or other risks following the merger. With a strong credit rating from Merck, the transaction will be fully financed and there will be no financial contingency in the transaction agreement.
In combination with Versum’s businesses Merck said that it would create a deep and complementary portfolio of electronic materials, equipment and services for the semiconductor and display industries. “The combined R&D capabilities would enable faster innovation cycles and strengthen the product offering to customers. They would offer increased scale, product and service depth, an enhanced global presence and a strengthened supply chain, which would help drive leading innovation supported by long-term tailwinds in the industry. Moreover, they would provide an additional source for innovation through leading positions in attractive segments” the company said.
Chairman of the Executive Board and CEO of Merck, Stefan Oschmann said, “We truly believe in the power of a combined electronic materials portfolio of Merck and Versum. Our attractive cash proposal to Versum’s investors underlines that we are fully committed to completing this transaction successfully”. “It is our clear intention to further strengthen our operations in the U.S. We are proud of our nearly 130 years of U.S. market history and already more than 10,000 highly qualified employees today working at more than 50 sites coast-to-coast.”
Merck expects the deal to close in the second half of 2019, which it said will reap cost synergies of approximately EUR 60 million annually. Merck is working on the deal with bank Guggenheim and law firm Sullivan Cromwell, which a spokesman said was fully equity and debt – financed and has not yet been discussed with Versum.