Merck agrees to buy Cubist Pharmaceuticals for $9.5bn

As part of the deal, Merck will pay about $102 per share in cash, which represents a 35% premium to Cubist’s average stock price for the most recent five trading days.

Merck chairman and chief executive officer Kenneth Frazier said: "Cubist is a global leader in antibiotics and has built a strong portfolio of both marketed and late-stage pipeline medicines.

"Combining this expertise with Merck’s strong capabilities and global reach will enable us to create a stronger position in hospital acute care while addressing critical areas of unmet medical need, such as antibiotic resistance."

Cubist is focused on the discovery, development and supply of antibiotics to treat infectious diseases and other conditions.

The deal will give Merck access to Cubist’s intravenous antibiotic Cubicin, which is the only approved once-a-day therapy for both S. aureus bacteremia and complicated skin and skin structure infections (cSSSI).

Cubist chief executive officer Michael Bonney said: "Under Merck’s robust commercial platform, global reach and scientific expertise, we believe Cubist’s programs can thrive. We’re proud of the company that our team has built and are confident that Cubist’s important mission and focus on significant unmet medical needs will continue."

Cubist’s in-line and late-stage pipeline of anti-infective medicines including Zerbaxa will improve Merck’s hospital acute care business in a variety of therapeutic areas, including Gram-positive and Gram-negative multi-drug resistant infections.

Currently, Zerbaxa is pending approval from the US Food and Drug Administration (FDA).

Under the deal, Merck, through a subsidiary, will start a tender offer to acquire all outstanding shares of Cubist.

The closing of the tender offer will be subject to certain conditions, including the tender of shares representing at least a majority of the total number of Cubist’s outstanding shares, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.

Following completion of the tender offer, Merck will acquire all remaining shares through a second-step merger without the need for a stockholder vote under Delaware law, while the two firms expect to close the transaction in the first quarter of 2015.

Image: Merck agrees to acquire Cubist for about $9.5bn. Photo: courtesy of adamr/ freedigitalphotos.net.