BRUSSELS—The European Union's antitrust authorities on Monday
approved German pharmaceutical company Merck KGaA's $17 billion
proposed purchase of Sigma-Aldrich Corp , a U.S. supplier of
laboratory testing materials, but said they were setting a number
of conditions on the deal.
The Merck Millipore division focuses on developing, producing
and selling tools and products for the life sciences industry. St.
Louis-based Sigma-Aldrich is one of the largest makers of chemicals
and biological materials used in scientific laboratories.
The Commission said it had concerns the merged entity would have
faced too few competitive pressure from the remaining players in
the markets for certain laboratory chemicals, which could risk a
rise in prices. The two companies are the leading European
suppliers of solvents and inorganics used in labs and research
centers.
As a result, the two companies have offered to take a series of
steps to win approval of the deal.
Sigma-Aldrich will sell off its manufacturing assets in Seelze,
Germany, where most of the solvents and inorganics sold by Sigma in
Europe are made.
It will also have to divest some brands and trademarks such as
Fluka and Hydranal on a worldwide basis. After divesting the
assets, the company will have to give a temporary license to the
Sigma-Aldrich brand for the supply of solvents and inorganics.
It will also have to transfer customer information and a
solution to ensure what the European Commission called a "temporary
channel to the market," the EU authorities said in a press
release.
Merck Chief Financial Officer Marcus Kuhnert said last month the
company continues to expect the acquisition to close by mid-2015,
but acknowledged the deal was being held up because of European
Union concerns over potential antitrust issues.
Merck KGaA isn't affiliated with Merck & Co. of the U.S.
The proposed merger is the latest instance of consolidation
among makers of laboratory testing materials. In 2013, Thermo
Fisher Scientific Inc. agreed to pay $13.6 billion to acquire Life
Technologies Corp., a primary competitor of Sigma-Aldrich's.
Analysts have said the combination of Merck and Sigma-Aldrich
would enable the new company to better compete for business from
pharmaceutical companies, which have sought to cut costs by
limiting the number of suppliers they use.
Write to Laurence Norman at laurence.norman@wsj.com
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