The acquisition by Merck KGaA, the world’s oldest pharmaceutical company, of US-based life sciences company Millipore Corporation, would create a business worth close to Rs 900 crore in India for the German drug and chemical major. Further, the acquisition will enable Merck to access new markets in India for bio-pharma and bio-processing solutions and analytical tools for research and development, said analysts.
Millipore had Rs 170 crore revenue from India in 2009 and employs about 300 people in the country. It has a manufacturing and research and development centre in Bangalore, besides additional offices in Ahmedabad, Hyderabad, Kolkata, Mumbai, and Delhi. It operates in areas such as pharma and biotech processing, research and development, tools for laboratory analysis and environmental testing and monitoring.
The stock exchange listed Merck Ltd, the flagship Indian arm of Merck KGaA, as having Rs 473.2 crore turnover in 2009. Merck has a manufacturing facility at Goa and is the largest manufacturer of Vitamin E in India. It also operates a privately-held company in India in the form of Merck Specialities, which sells active drug ingredients, laboratory reagents and specialty chemicals. Analysts said the business of Merck Specialities could be to the tune of Rs 200-250 crore.
Merck KGaA had announced the acquisition of Millipore three days earlier, in a deal valued at $7.2 billion, to create a combined $2.9 billion worth of life science businesses. In 2009, Millipore generated sales of $1.7 billion, with 6,000 employees in more than 30 countries. Merck, with its history dating to 1668, had total revenues of Euro 7.7 billion in 2009.
It employs 33,000 employees in 61 countries.
“It is unlikely that Merck will merge Millipore with the listed entity, Merck Ltd, and may merge it with the private entity, Merck Specialities,” said Ranjit Kapadia, vice-president, institutional research, of HDFC Securities.
Millipore has a subsidiary named Waters, which sells pharmaceutical analytical equipment and related products.
In October, last year, Merck Specialties had acquired Bangalore Genei (India) Pvt Ltd, a company specialising in new-generation proteomic and genomic research technologies or cutting-edge study of proteins and organisms, from the Chennai-based speciality chemicals major, the Sanmar Group. The acquisition, for an undisclosed amount, was aimed to make Merck one of the leading bioscience companies in India.
Sources said Millipore’s entry into India dates back to 1988 through a joint venture with Subhash Bagaria, chairman and managing director of Bangalore-based biotech and pharmaceutical company Kemwell Laboratories. In November last year, Millipore had acquired the 60 per cent stake owned by Bagaria for an undisclosed sum, to make Millipore India Pvt Ltd a 100 per cent subsidiary of Millipore Corporation.
“At present, integration of Millipore Corporation with Millipore India is going on and with the new development, the whole integration with Merck may take at least five to six months,” said a source close to Millipore’s operations in India.
