Merck Versum Merger Agreement
On November 5, 2020, Merck, a leading science and technology company, and Versum Materials, a leading specialty materials supplier to the semiconductor industry, announced the completion of their merger agreement. The final deal was worth a total of $6.5 billion, and the newly formed company is expected to generate sales of approximately $3 billion.
The merger agreement was first announced in April 2019, and after receiving all necessary regulatory approvals, the deal was finally completed over a year later. The merger has created a new business unit within Merck, named Electronics, which will focus on materials and solutions for the semiconductor industry.
Under the terms of the agreement, Merck acquired all outstanding shares of Versum for $53 per share in cash, representing a premium of approximately 52% over the closing share price of Versum on January 25, 2019. This premium reflects the value that Merck sees in Versum’s strong position in the semiconductor materials market.
The merger is a strategic move for Merck, as it strengthens the company`s position in the electronics industry and provides an opportunity for growth in a rapidly expanding market. The semiconductor industry is expected to continue growing in the coming years, driven by the increasing demand for electronics and the transition to new technologies such as 5G.
The newly formed Electronics unit will bring together Merck`s expertise in liquid crystal and OLED materials with Versum`s expertise in specialty gases, advanced deposition materials, and formulated solutions. This combination of capabilities will enable the new unit to provide customers with a broad range of cutting-edge materials and solutions for advanced electronics applications.
The merger is also expected to bring significant cost synergies, as the two companies have complementary strengths in different areas of the semiconductor materials market. By combining their resources, the new unit will be able to improve efficiency and reduce costs, which will ultimately benefit customers and shareholders alike.
In conclusion, the merger between Merck and Versum is a significant development in the semiconductor materials industry, and it demonstrates the growing importance of advanced materials and solutions in the electronics industry. The newly formed Electronics unit will be well-positioned to capitalize on the opportunities presented by the expanding semiconductor market and drive growth for Merck in the years to come.
