Merck $8.4 billion takeover sends Cubist stock soaring
Merck will buy Cubist Pharmaceuticals for $8.4 billion, illustrating a new emphasis on combating so-called 'superbugs' that have drawn warnings from global health organizations. Shares of Cubist, based in Lexington, Massachusetts, soared before markets opened Monday while Merck slipped.
Merck will buy Cubist Pharmaceuticals for $8.4 billion, illustrating a new emphasis on combating so-called 'superbugs' that have drawn warnings from global health organizations. Shares of Cubist, based in Lexington, Massachusetts, soared before markets opened Monday while Merck slipped.
Merck聽will buy Cubist Pharmaceuticals for $8.4 billion, illustrating a new emphasis on combating so-called "superbugs" that have drawn dire warnings from global health organizations.
Cubist Pharmaceuticals Inc. does advanced antibiotic research.
The World Health Organization warned in April that without a coordinated effort, "the world is headed for a post-antibiotic era, in which common infections and minor injuries which have been treatable for decades can once again kill."
鈥淐ubist is a global leader in antibiotics and has built a strong portfolio of both marketed and late-stage pipeline medicines,鈥� said Kenneth C. Frazier, chairman and chief executive officer, Merck. 鈥淐ombining this expertise with Merck鈥檚 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.鈥�
鈥淐ombining with Merck is an exciting opportunity to accelerate Cubist鈥檚 established leadership in antibiotics and deliver significant, certain and immediate value to shareholders,鈥� said Michael Bonney, chief executive officer of Cubist, said in a press statement. 鈥淲e have a deep respect for Merck, and it is clear that they share our commitment to addressing the growing, global problem we are facing. Under Merck鈥檚 robust commercial platform, global reach and scientific expertise, we believe Cubist's programs can thrive. We鈥檙e 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.鈥�
Merck聽called Cubist a global leader in the development of antibiotics and said that the acquisition will help it address critical areas like antibiotic resistance.
The company, based in Whitehouse Station, New Jersey, said Monday that it will pay $102 per share of Cubist, a 37 percent premium to its closing price Friday.
Merck outlined the implications of the agreement for shareholders in a news release Monday:聽
Merck聽expects the deal to add more than $1 billion of revenue to its 2015 base and it's expected to significantly add to profit in 2016 and beyond.
The transaction includes $1.1 billion in debt.
Shares of Cubist, based in Lexington, Massachusetts, soared before markets opened Monday while聽Merck聽slipped.