Merck (Darmstadt, Germany) announced on Wednesday that it has proposed acquiring Versum Materials for $5.9 billion in cash, surpassing the all-stock, $4-billion offer Entegris and Versum announced in January.
Merck says a combination with Versum would create a “deep and complementary portfolio” of electronic materials, equipment and services for the semiconductor and display industries with combined proforma annual performance materials sales of €3.5 billion ($3.98 billion). “The combined R&D capabilities would enable faster innovation cycles and strengthen the product offering to customers,” Merck adds. “They would offer increased scale, product and service depth, an enhanced global presence and a strengthened supply chain, which would help drive leading innovation supported by long-term tailwinds in the industry. Moreover, they would provide an additional source for innovation through leading positions in attractive segments.”
Versum said, however, that it continues to believe in the strategic and financial rationale of the proposed merger of equals with Entegris. “Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Versum’s Board of Directors will thoroughly review the Merck proposal,” Versum adds.
Merck’s $48/share offer is a 51.7% premium to Versum’s price 25 January 2019, the last trading day prior to Entegris’s announcement, and a 15.9% premium to Versum’s current price. It reflects an enterprise value for Versum 13.3 times 2018 EBITDA multiple.
In a letter to Versum’s board of directors, Merck says Entegris’s offer “significantly” undervalues Versum. “Instead of the speculative value offered by the Entegris transaction, the all-case proposal would deliver immediate and certain cash value to Versum stockholders and employees, shielding them from the significant integration, operational, and market risks posed by the all-stock Entegris transaction,” the letter adds. Stefan Oschmann, Chairman of the Executive Board and CEO of Merck, says the company anticipates €60 million in annual cost synergies to be fully realized by 2022, with the deal closing in the second half of 2019. Entegris and Versum had expected their merger to generate more than $75 million within 12 months of the deal’s close.
Entegris and Versum had expected their merger to generate more than $75 million within 12 months of the deal’s close.
Merck has engaged Guggenheim Securities, LLC as its financial advisor and Sullivan & Cromwell LLP as its legal counsel. Entegris did not immediately respond to requests for comment.
By Rebecca Coons
Source: Chemical Week
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?