Germany’s Merck makes $5.9 billion counterbid for Versum

FRANKFURT (Reuters): German drugs and lab supplies maker Merck KGaA is offering to buy Versum Materials in a cash deal valuing the electronic materials maker at $5.9 billion, including debt, topping a rival offer from US group Entegris.

Versum shares soared 15 percent to $48.32 in pre-market trading on Wednesday, while Merck’s shares lost 3 percent. Merck said it planned to buy Versum for $48 per share, a premium of 16 percent to Tuesday’s closing price and of 52 percent to the share price before Entegris’ offer.

Entegris announced a $4 billion all-stock deal in January, saying it wanted to create a big chemical supplier to the semiconductor market at a time when the industry is under pressure.

Shares in Versum, spun off from Air Products in 2016, fell 27 percent in 2018 as demand for microchips used in smartphones and other personal devices plateaued and a decade-long rally in US stock markets wobbled.

Merck, which in 2014 bought Britain’s AZ Electronic Materials for 1.9 billion euros, said it was ready to proceed immediately to due diligence and to quickly agree a deal, adding it did not need its own shareholders to approve a transaction. “The transaction that Versum recently disclosed significantly undervalues Versum,” Merck Chief Executive Stefan Oschmann said in a letter to Versum’s board of directors.