The merged company will generate annual turnover of around $3.5bn and will enable both firms to better compete with industry behemoth Thermo Fisher Scientific, which had 2007 revenues of nearly $10bn. "This transaction combines the industry's premier consumables provider with the industry's premier systems provider to create a world-class biotechnology tools company," said Greg Lucier, CEO of Invitrogen. The deal, which still needs approval by both companies' shareholders, is expected to close in the autumn. Following completion of the merger, the combined organisation will be named Applied Biosystems, Inc. and will be headquartered in Carlsbad, California. Both firms have played a large part in recent medical discoveries and breakthroughs, with Invitrogen's reagents having played a key part in the discovery of the AIDS virus and ABI providing the genetic analysers used in the human genome project. While perhaps best known for its research tools, Invitrogen also supplies the pharmaceutical and biopharmaceutical industry with cell culture media and reagents for large scale production. Similarly, ABI's analysis tools and instruments are used throughout the entire pharmaceutical work chain, from genetic analysis and target identification through to the quality control analysis of drugs. The merger follows ABI's separation from sister firm Celera in February and is reminiscent of Thermo Electron's merger with Fisher Scientific in 2006 which formed the world's largest life science instrument and reagent supplier. While ABI posted record revenues of over $2bn in 2007, the firm failed to see a significant revenue increase in 2008 due to the weakened pharmaceutical environment. The purchase price of $38 per share in cash and stock represents a premium of 12 per cent over its average closing price in the past 30 days and Invitrogen plans to fund the deal with the help of fully underwritten debt financing from Bank of America, UBS Investment Bank and Morgan Stanley. The total debt of the combined company would be $3.5 billion, including $2 billion in new debt. The price was lower than Cowen & Co. industry analyst Doug Schenkel expected, who suggested the price could have been as much as $43 per share. He also expressed concern over the "significant challenges" that may be faced in combining the two companies. However, Lucier was bullish about the challenges involved in the merger, stating: "we expect to realize the benefits of this transaction quickly and efficiently with an integration roadmap that will focus on creating maximum value for the combined company." The creation of this 'maximum value' is based on expected cost savings of around $125m by the end of the third year of combination as well as increased revenues of at least $50m from cross-selling opportunities and increased penetration into the developing biomedical research markets in South Korea, China and India .