The takeover comes only a few months after Serono had declared that it was no longer for sale.
Merck said the acquisition will give it a market-leading multiple sclerosis franchise which will broaden the business portfolio.
Merck made the agreement with the Bertarelli Family which owns a majority stake of Serono to purchase their shares. Subject to an antitrust review and closing of the purchase, Merck will hold 64.5% of the capital of Serono and 75.5% of the voting rights, for which Merck agreed to pay CHF1,100 per share in cash. Merck will make a public tender offer under Swiss law for the same price of CHF1,100 per share.
“Both companies have a unique opportunity to achieve a competitive advantage through a combined E1 billion R&D budget and a stronger product portfolio. The companies are a perfect fit with 28 compounds in development,” said Michael Roemer, chairman of Merck.
“With this transaction we create a combined business with strong capabilities, especially in neurology and oncology,” said Ernesto Bertarelli.
Serono initially put itself up for sale last year but the auction was pulled five months later without a high-enough bid being presented.
Merck's Pharma Ethicals division will be combined with Serono to create “Merck-Serono Biopharmaceuticals.” The headquarters of this business will be in Geneva, Switzerland. Merck-Serono Biopharmaceuticals' US headquarters will be in Boston.
The transaction is expected to close in early 2007.