Merck Millipore, a division of Merck KGaA, Darmstadt, Germany, the newly formed entity in the global life sciences space that commenced operations on July 15, will focus on the rapidly growing and highly profitable sector of bio-pharma research and production. The division operates as EMD Millipore only in US and Canada.

Merck assumes annual cost synergies of around € 75 million (US$ 100 million), expected to be realized by 2012 end. Based on final shareholders voting results to approve the acquisition of all outstanding shares of Millipore common stock by Merck KGaA on June 3, 2010, approximately 79 per cent of shares were voted, of which approximately 98 per cent were voted in favour of acquisition. The Merck Millipore transaction views on primarily combining expertise and capabilities. Key cost synergies will come from streamlining global general & administrative (G&A) functions and implementing best practices. The new division is almost twice the size of Millipore or Merck Performance Chemicals alone, with around 10,000 employees in 64 countries.

“Bringing together our two R&D capabilities will make Merck Millipore one of the top three investors in the life science tools industry which could further drive innovation. We are committed to investing in global supply chain and operations besides develop a talented workforce,” Dr Bernd Reckmann, president, Merck Millipore told Pharmabiz in an email interaction.

The combination of Merck Chemicals and Millipore creates a world-class partner in life sciences to capture a significant scale in the market for high-margin specialty products. The Millipore acquisition will help unlock the potential of Merck Chemicals by adding a highly profitable, fast-growing business. The acquisition is fully in line with Merck’s value-driven acquisition criteria.

“We would increase our presence in the US to build on Merck’s in-depth sector knowledge. The two businesses are highly complementary and will benefit from a comprehensive product offering and enhanced global scale,” he added.

The division will have global manufacturing and distribution capabilities, enabling it to compete more effectively. A larger sales organization will lead to greater customer intimacy and broader global sales coverage, opening up new growth opportunities. Millipore will benefit from Merck’s investment in its operations, people and the region. The transaction is not aimed at leveraging synergies, but at combining knowledge and expertise. Joining a global company with 40,000 employees will offer additional benefits not only for the business but also for Millipore’s employees, he said.

According Dr Reckmann it was too premature to comment new trends in products and on the strategy for emerging markets.

Pharmabiz had reported that in October 2009, Merck KGaA’s Indian subsidiary Merck Specialties Pvt Ltd had acquired Bangalore Genei (India) Private Ltd, Now with the acquisition of Millipore Corporation which included its India subsidiary, it will be the second entry in Bangalore for the German life sciences major.

When asked about the plans to integrate the two acquisitions from an India perspective, Dr Reckmann said, “Due to exchange of information restrictions prior to the close of the transaction, we are still in the process of understanding and evaluating the country structures. Now that the transaction is closed, we will take a closer look at the country organizations. We will provide added detail as it is available, but do not expect to make any decisions prior to Q4 2010 or Q1 2011.”