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Merck KGaA. (3/17/15). "Press Release: Merck Places U.S. Bond Amounting to US$ 4.0 Billion. Placement Is an Important Element of the Financing of the Proposed Acquisition of Sigma-Aldrich". Darmstadt.

Region Region United States (USA)
Organisations Organisation EMD Finance LLC
  Group Merck (DE) (Group)
  Organisation 2 Sigma-Aldrich Corporation (Nasdaq: SIAL)
  Group Merck (DE) (Group)
Products Product investment banking
  Product 2 reagents (bio/biochemical)
Index terms Index term Merck (DE)–SEVERAL: credit, 201503–202503 US bond $1.6b 10y 3.25% EMD Finance LLC
  Index term 2 Sigma-Aldrich–Merck (DE): investment, 201409–201511 acquisition $17b in cash
Person Person Kuhnert, Marcus (Merck (DE) 201408– CFO before CFO of Henkel Laundry + Home Care businss unit)
     


> Five tranches with maturities between 2 and 10 years placed

> Conservative financial policy meets with great interest also outside Europe


Merck, a leading company for innovative and top-quality high-tech products in healthcare, life science and performance materials, successfully placed a U.S. bond via its U.S. subsidiary EMD Finance LLC. The oversubscribed placement is an important element of the financing of the proposed acquisition of the life science company Sigma-Aldrich, which Merck announced in September 2014.

A total of five tranches were placed, comprising floating rate and fixed rate notes. The floating rate notes have a maturity of 2 years (US$ 250 million with a 0.35% spread over 3-month U.S. dollar LIBOR). The fixed rate notes have a maturity of 3 years (US$ 400 million with a coupon of 1.70%), 5 years (US$ 750 million with a coupon of 2.40%), 7 years (US$ 1.0 billion for 2.95%), and 10 years (US$ 1.6 billion for 3.25%).

“This first U.S. bond in Merck’s history shows that with our conservative financial policy, Merck is an attractive name for investors also outside Europe. In addition, the bond is an extremely important element of the financing of the proposed acquisition of Sigma-Aldrich. The strong resonance is very encouraging and is enabling us to further diversify our investor base,” said Marcus Kuhnert, Chief Financial Officer of Merck.

The bond achieved a well-diversified distribution among a wide range of institutional investors such as fund managers, insurance companies, pension funds, and banks. Bookrunners of the transaction were Merck’s relationship banks.

In December 2014, Merck had already successfully issued a euro hybrid bond amounting to € 1.5 billion. Merck is rated A flat (negative outlook) by Standard & Poor’s and Baa1 (negative outlook) by Moody’s.

The proposed acquisition of the laboratory supplier Sigma-Aldrich for US$ 17 billion is part of the “Fit for 2018” transformation and growth program, which aims to sustainably strengthen the company’s three growth platforms – Healthcare, Life Science and Performance Materials. Merck continues to expect the transaction to close in mid-2015.


Cautionary Note Regarding Forward-Looking Statements

This communication may include “forward-looking statements.” Statements that include words such as “anticipate,” “expect,” “should,” “would,” “intend,” “plan,” “project,” “seek,” “believe,” “will,” and other words of similar meaning in connection with future events or future operating or financial performance are often used to identify forward-looking statements. All statements in this communication, other than those relating to historical information or current conditions, are forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond control of Merck KGaA, Darmstadt, Germany, which could cause actual results to differ materially from such statements.
Risks and uncertainties relating to the proposed transaction with Sigma-Aldrich Corporation ("Sigma-Aldrich") include, but are not limited to: the risk that regulatory or other approvals required for the transaction are not obtained or are obtained subject to conditions that are not anticipated; competitive responses to the transaction; litigation relating to the transaction; uncertainty of the expected financial performance of the combined company following completion of the proposed transaction; the ability of Merck KGaA, Darmstadt, Germany, to achieve the cost-savings and synergies contemplated by the proposed transaction within the expected time frame; the ability of Merck KGaA, Darmstadt, Germany, to promptly and effectively integrate the businesses of Sigma-Aldrich and Merck KGaA, Darmstadt, Germany; the effects of the business combination of Merck KGaA, Darmstadt, Germany, and Sigma-Aldrich, including the combined company’s future financial condition, operating results, strategy and plans; the implications of the proposed transaction on certain employee benefit plans of Merck KGaA, Darmstadt, Germany, and Sigma-Aldrich; and disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers.

Additional risks and uncertainties include, but are not limited to: the risks of more restrictive regulatory requirements regarding drug pricing, reimbursement and approval; the risk of stricter regulations for the manufacture, testing and marketing of products; the risk of destabilization of political systems and the establishment of trade barriers; the risk of a changing marketing environment for multiple sclerosis products in the European Union; the risk of greater competitive pressure due to biosimilars; the risks of research and development; the risks of discontinuing development projects and regulatory approval of developed medicines; the risk of a temporary ban on products/production facilities or of non-registration of products due to non-compliance with quality standards; the risk of an import ban on products to the United States due to an FDA warning letter; the risks of dependency on suppliers; risks due to product-related crime and espionage; risks in relation to the use of financial instruments; liquidity risks; counterparty risks; market risks; risks of impairment on balance sheet items; risks from pension obligations; risks from product-related and patent law disputes; risks from antitrust law proceedings; risks from drug pricing by the divested Generics Group; risks in human resources; risks from e-crime and cyber attacks; risks due to failure of businesscritical information technology applications or to failure of data center capacity; environmental and safety risks; unanticipated contract or regulatory issues; a potential downgrade in the rating of the indebtedness of Merck KGaA, Darmstadt, Germany, or Sigma-Aldrich; downward pressure on the common stock price of Merck KGaA, Darmstadt, Germany, or Sigma-Aldrich and its impact on goodwill impairment evaluations; the impact of future regulatory or legislative actions; and the risks and uncertainties detailed by Sigma-Aldrich with respect to its business as described in its reports and documents filed with the U.S. Securities and Exchange Commission (the “SEC”).

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included elsewhere, including the Report on Risks and Opportunities Section of the most recent annual report and quarterly report of Merck KGaA, Darmstadt, Germany, and the Risk Factors section of Sigma-Aldrich’s most recent reports on Form 10-K and Form 10-Q. Any forward-looking statements made in this communication are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.


Disclaimer

This publication constitutes neither an offer to sell nor a solicitation to buy or subscribe to securities. This publication is not an offer of securities for sale in the United State of America, Canada, Japan or Australia.

The information contained herein is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions of any State of the United States of America or the District of Columbia) and must not be distributed to U.S. persons (as defined in Regulation S of the U.S. Securities Act of 1933, as amended (the "Securities Act")) or publications with a general circulation in the United States of America. This publication is not an offer of securities for sale in the United States of America. The securities have not been and will not be registered under the Securities Act and may not be offered or sold in the United States of America absent registration or an exemption from registration under the Securities Act. Neither Merck KGaA, Darmstadt, Germany nor EMD Finance LLC intend to register any portion of the offering in the United States of America or to conduct a public offering of the securities in the United States of America.

This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

All Merck Press Releases are distributed by e-mail at the same time they become available on the Merck Website www.merckgroup.com/media. Please go to http://www.merckgroup.com/subscribe to register online, change your selection or discontinue this service.


Merck is a leading company for innovative and top-quality high-tech products in healthcare, life science and performance materials. The company has six businesses – Merck Serono, Consumer Health, Allergopharma, Biosimilars, Merck Millipore and Performance Materials – and generated sales of € 11.3 billion in 2014. Around 39,000 Merck employees work in 66 countries to improve the quality of life for patients, to foster the success of customers and to help meet global challenges. Merck is the world’s oldest pharmaceutical and chemical company – since 1668, the company has stood for innovation, business success and responsible entrepreneurship. Holding an approximately 70% interest, the founding family remains the majority owner of the company to this day. Merck, Darmstadt, Germany holds the global rights to the Merck name and brand. The only exceptions are Canada and the United States, where the company operates as EMD Serono, EMD Millipore and EMD Performance Materials

   
Record changed: 2016-06-07

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