Merck to use loans, bonds to fund $17 billion Sigma-Aldrich acquisition

By Lisa Kerner

Charlotte, N.C., Sept. 22 – Merck KGaA has secured complete bridge financing for its proposed $17 billion acquisition of Sigma-Aldrich Corp., according to Merck chief financial officer Marcus Kuhnert.

“The final financing structure will be comprised of a combination of cash from our balance sheet, from bank loans and bonds,” Kuhnert said during a conference call on Monday to discuss the transaction details.

The company expects its combined cash flow to allow it to “rapidly deleverage our financial debt, and we are fully committed to stick to our conservative financial policy to maintain our investment-grade credit rating,” the CFO said.

Merck will acquire all of the outstanding shares of Sigma-Aldrich for $140.00 per share in cash, which represents a 37% premium to the latest closing price of $102.37 on Friday, according to a news release.

The transaction is slated to close in mid-2015.

Merck expects to fully realize annual synergies of about $340 million within three years after closing.

Guggenheim Securities and JPMorgan advised Merck.

St. Louis-based Sigma-Aldrich makes chemicals, biochemicals and equipment used in scientific research.

Merck is a pharmaceutical and chemical company based in Darmstadt, Germany.

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