LONDON â€" The German drug and chemical maker Merck has made an all-cash offer to buy the specialty chemical manufacturer AZ Electronic Materials for 1.57 billion pounds, or about $2.57 billion, the companies said on Thursday.
Under the terms of the deal, Allgemeine Beteiligungs-GmbH, an indirect, wholly owned subsidiary of Merck, would acquire all of AZ Electronic’s outstanding shares for 403.5 pence a share, representing a 53 percent premium over its closing price on Wednesday.
“With this strategic move we are strengthening the portfolio of Merck by adding a premium business to our existing business of high-margin specialty chemicals,†said Karl-Ludwig Kley, chairman of Merck’s executive board. “The combination will enable Merck to access additional growth areas in the electronics industry to benefit even better from the increasing demand for electronic devices beyond displays.â€
AZ Electronic’s board believes the offer is “fair and reasonable,†the Luxembourg company said.
About 68 percent of AZ Electronic’s business is focused on the manufacture of chemicals used in the semiconductor industry, while another 30 percent is focused on chemicals used in the manufacture of flat panel displays. Apple Inc. is among its customers.
Bank of America Merrill Lynch is the financial adviser to Merck, while Rothschild was AZ Electronic’s lead financial adviser, and Goldman Sachs and UBS are acting as joint financial adviser to AZ Electronic in respect to the offer. The legal advisers are Allen & Overy for Merck and Clifford Chance for AZ Electronic.
Shares of AZ Electronic were up 51.8 percent to 399 pence in trading on Thursday morning.
