The German firm plans to buy US life science company Sigma Aldrich for $17 billion (€15bn), but in order to fulfil commitments made to the European Union in order to win antitrust approval, needed to divest certain parts of the business.
It seems Honeywell has come to the rescue, and Merck has submitted the agreement to the European Commission, which has to approve the transaction in order for Merck to complete the acquisition of Sigma-Aldrich.
“This is another key step towards completing the acquisition of Sigma-Aldrich. Teams at both Merck and Sigma-Aldrich have been working intensely on planning the integration of our two businesses and we are all excited about what this combination will bring for customers and employees,” says Bernd Reckmann, Member of the Executive Board of Merck.
“Together we offer life science customers across the world a broader portfolio of products, greater geographic reach and an unmatched combination of industry-leading capabilities.”
Honeywell gains
For Honeywell, this will see it acquire the manufacturing and all related assets in Seelze, Germany, where most of the solvents and inorganics sold by Sigma-Aldrich in Europe are made.
In addition, it will also acquire the solvents and inorganics sold by Sigma-Aldrich in Europe under the Sigma-Aldrich brand, worldwide under the Fluka brand and associated trademarks such as Hydranal and Chromasolv as well as a temporary license to the Sigma-Aldrich brand for the supply of solvents and inorganics in the European Economic Area.
The deal will also see Honeywell ensure the business remains competitive and give it the chance to build its own marketing channels with the help of transitional services that have been agreed.
The agreement is subject to customary closing conditions, including regulatory review; but Merck says that these approvals do not constitute a precondition for the European Union approval and completion of the Sigma-Aldrich transaction.
The European Commission previously provided conditional approval for the acquisition of Sigma-Aldrich on June 15, 2015. Merck continues to expect closing until the end of November 2015 as announced on September 28, 2015.