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Merck Millipore launched after $7bn takover

By Gareth Macdonald , 19-Jul-2010

Germany’s Merck KGaA has completed its $7bn (€b5.2n) acquisition of Millipore, unveiling plans to target “high-growth, high-margin” bio-research and bio-production markets.

The new unit will be renamed Merck Millipore, or EMD Millipore in the US and Canada, and will operate separate Bioscience, laboratory solutions and industrial process solutions businesses.

The group will provide technologies to improve the efficiency of the biomanufacturing process to pharma and biotech companies and researchers in academia.

Bernd Rechmann, who will head Merck Millipore, said: “The increased breadth of the Merck Millipore product portfolio, together with the expertise of our talented people, will allow us to deepen our customer relationships and gain the new insights we need to further drive innovation.”

Chemicals biz boost

The acquisition is part of the German drugmaker's effort to develop a balanced business profile and specifically to increase the contribution made by its chemicals business.

At present Merck’s chemicals unit, which makes everything from active pharmaceutical ingredients (API) to compounds used in the production of cosmetics, contributes about 25 per cent of the firm’s annual €9bn revenue.

But, according to comments made when the Millipore deal was announced in March , Merck is seeking to increase this to around 35 per cent over the next few years.

Such efforts fit with the wave of diversification that has swept the pharmaceutical sector in recent times as patent run out and competition increases.

However, while Big Pharma peers like GlaxoSmithKline, Pfizer and Sanofi Aventis have focused on building in generics and emerging markets, Merck’s decision to boost its chemicals manufacturing business is something of a novel approach.

The move may suggest that Merck sees more long-term potential in serving the rapidly expanding biomanufacturing sector than it does in battling for business in new pharmaceutical markets.

If so, the acquisition of an established player like Millipore may come to be seen as a particularly shrewd move if and when competition in “pharmerging” markets reaches saturation point.

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