Merck KGaA Closes €5.8 Billion Versum Buy

Abstract

Germany’s Merck KGaA has completed its € 5.8 billion acquisition of US-based Versum Materials. The Darmstadt-headquartered pharmaceuticals and chemicals producer said the buy makes it a leading electronic materials player focused on the semiconductor and display industries.

Germany’s Merck KGaA has completed its € 5.8 billion acquisition of US-based Versum Materials. The Darmstadt-headquartered pharmaceuticals and chemicals producer said the buy makes it a leading electronic materials player focused on the semiconductor and display industries.

The closing of the transaction sealed last spring follows its recent approval by China’s SAMR regulatory authority, the final hurdle. Versum will no longer be traded on the New York Stock Exchange.

In April, the two sides signed a definitive agreement calling for Merck to take over the US player based at Tempe, Arizona. Earlier, the German group had raised its offer from $48 to $53 per share, and Versum declared this to be a “Superior Proposal that offered previously by compatriot Entegris.

With planning for integration of the new activities “well on track,” Merck said it expects annual synergies of €75 million from 2022 onward. Incorporation of the Versum workforce will swell its global employment total by around 2,300 to 56,000 in 66 countries.

Arizona to be Merck’s hub for US electronics

Versum’s new owner plans to retain the company’s site in Tempe as a hub for the combined electronic materials business in the US. Its activities will be integrated into the Darmstadt group’s Semiconductor Solutions business unit, alongside Display Solutions and Surface Solutions one of three  units in its Performance Materials division. 

Two newly created sub-units will be called Semiconductor Materials and Delivery Systems & Services.  Semiconductor Materials will be led by Anand Nambiar, who is currently responsible for the Semiconductor Solutions business unit at Merck. The business will continue to focus on the development and commercialization of material-based solutions for semiconductor manufacturers.

Delivery Systems & Services, to be headed by former Versum manager Jeff White, will focus on development and deployment of equipment for semiconductor manufacturers.

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Additionally, this unit will offer services to support the equipment installed and the safe handling of specialty materials that flow through it, Merck said.

Another former Versum manager, John Langan, will serve as chief technology officer of Performance Materials. Merck said all other members of the Performance Materials leadership team have been confirmed in their roles.

 “By acquiring Versum, we will be optimally positioned to capitalize on long-term growth trends in the electronic materials industry. At the same time, we are broadening Performance Materials, balancing our portfolio with three strong business sectors and sharpening our strategic focus on innovation-driven technologies,” said Merck CEO Stefan Oschmann.

For the 86 calendar days until year-end, Merck said it expects the legacy Versum business to contribute around € 270 million its own group net sales and € 80-90 million to group EBITDA.


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