Merck KGaA struck a cash deal to purchase Silence Therapeutics for about $1.1 billion, valuing each American depositary share at $20. That works out to a 130% premium to Silence's prior close, and traders reacted fast: the stock more than doubled intraday to $19.61, while Merck's shares slipped as much as 1.7%.
Merck will fund the transaction with proceeds from new debt, and the acquisition is expected to close next quarter. The roughly $1.1 billion price tag represents enterprise value.
Silence recently reported positive data for divesiran, an investigational therapy targeting a rare, slow-growing blood cancer. Iain Ross, the company's chairman, said the medicine could be a "best-in-class" therapy.
Bloomberg Intelligence, citing the consensus of analysts, projects divesiran could generate around $400 million in yearly sales by the mid 2030s if it launches in 2030.
When headlines shift, staying informed matters, so sign up for the free Market Briefs to get clear five-minute updates each morning
Merck is reinforcing its pipeline after development setbacks and as multiple sclerosis treatment Mavenclad faces growing generic competition. This acquisition extends its rare-disease push after last year's purchase of SpringWorks Therapeutics Inc.
It is the company's second acquisition since Kai Beckmann became Chief Executive Officer earlier this year.
In plain English: Merck is adding an experimental rare-disease asset while leaning on new debt, even as it pursues a larger life-science buildout. Watch the trade-off between pipeline growth and financing costs, plus any read-through to deal-driven reratings. To avoid confusion, Merck KGaA has no corporate affiliation with the US-based Merck & Co.
Markets can be noisy, so subscribe to the free Market Briefs newsletter for a concise daily digest you can read quickly
