Merck places bonds

Mer­ck, a sci­ence and tech­nol­o­gy com­pa­ny, today suc­cess­ful­ly placed bonds amount­ing to € 2.0 bil­lion. The place­ment is a com­po­nent of the financ­ing of the planned acqui­si­tion of Ver­sum Mate­ri­als, which was announced in April 2019.

The place­ment com­pris­es three tranch­es: a fixed-rate bond with a matu­ri­ty of four and a half years amount­ing to € 600 mil­lion and pay­ing a coupon of 0.005%, a sec­ond tranche of € 600 mil­lion with a matu­ri­ty of 8 years, pay­ing a coupon of 0.375% as well as a third tranche of € 800 mil­lion with a matu­ri­ty of 12 years, pay­ing a coupon of 0.875%. On June 18, Mer­ck had already placed a euro hybrid bond amount­ing to € 1.5 bil­lion to finance the planned acquisition.

“Fol­low­ing the suc­cess­ful place­ment of hybrid bonds two weeks ago, we have made use of the favor­able mar­ket envi­ron­ment in order to final­ize the financ­ing of the planned acqui­si­tion of Ver­sum. We’re res­olute­ly pur­su­ing our con­ser­v­a­tive finan­cial pol­i­cy fur­ther,” said Mar­cus Kuh­n­ert, Mem­ber of the Exec­u­tive Board and Chief Finan­cial Offi­cer of Merck.

The bonds issued today were sig­nif­i­cant­ly over­sub­scribed and achieved a well-diver­si­fied dis­tri­b­u­tion among a wide range of insti­tu­tion­al investors such as fund man­agers, insur­ance com­pa­nies, pen­sion funds, and banks. Bookrun­ners of the trans­ac­tion were Merck’s rela­tion­ship banks.

The acqui­si­tion of Ver­sum is expect­ed to strength­en the Per­for­mance Mate­ri­als busi­ness sec­tor. Ver­sum is a lead­ing sup­pli­er of inno­va­tion-dri­ven, high-puri­ty process chem­i­cals, gas­es and equip­ment for semi­con­duc­tor man­u­fac­tur­ing. The trans­ac­tion is expect­ed to close in the sec­ond half of 2019, sub­ject to reg­u­la­to­ry clear­ances and the sat­is­fac­tion of oth­er cus­tom­ary clos­ing conditions.