Media moguls: Merck KGaA squares up to Thermo and GE with $17bn Sigma buy

By Gareth Macdonald

- Last updated on GMT

Sigma-Aldrich HQ in St Louis, Missouri
Sigma-Aldrich HQ in St Louis, Missouri

Related tags Emd millipore Merck millipore

Merck KGaA has continued its diversification effort with a $17bn (€13bn) bid for Sigma Aldrich that will see it battle Thermo Fisher and GE Healthcare for a share of the life sciences tools and supplies market.

The deal – announced yesterday​ – is in keeping with Merck’s efforts to broaden its revenue streams beyond hit and miss drug development into life science supplies and technologies that began with its acquisition of EMD Millipore in 2010​.

Merck acknowledged this, explaining that the deal would expand Millipore’s global reach, citing Sigma’s established presence in both North America and fast growing Asian​ markets as drivers for the all-cash deal.

This is also the view of ISI analyst Ross Muken, who keeps a close eye on the life science tools sector.

He told “Sigma-Aldrich has a phenomenal business in China and in Asia Pacific broadly​” adding that this “should be a huge platform for growth​.”

Muken also suggested the takeover may see SAFC, Sigma-Aldrich’s fine chemicals business, and Bioreliance, its biopharma-focused testing and services unit, become more closely integrated although he did not go into specifics.

ISI’s senior managing director also commented on Merck’s statement that it intends to maintain a significant presence in Sigma-Aldrich’s home city St Louis, Missouri.

Mukan said while Merck may well keep a presence in St Louis and at its own site in Billerica, Massachusetts, “obviously there will be some headcount losses given synergy realization, but may also come from the Millipore side​.”

Small media or large

The acquisition will also impact the bioprocessing media market as Sigma Aldrich is a leading supplier alongside Sartorius Stedim Biotech, Thermo Fisher and its recent acquisition Life Technologies​ and GE Healthcare and its newly purchased Hyclone unit​.

This was acknowledged by a Merck KGaA spokesman who told "Merck Millipore [EMD Millipore in the US] already offered media and Sigma-Aldrich's position in this segment is extremely complementary to our offers to customers. So for us and the clients it makes sense as we can now offer the full value chain for biopharmaceutical production​."

Quite what the $17bn deal and the earlier Thermo and GE acquisitions, which were worth $15bn and $1bn, respectively, say about the future value of the global bioprocessing media market, which is currently valued at $5bn, is unclear.

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