Billion dollar distribution

A fund managed by the global equity firm of Clayton, Dubilier & Rice is to buy Merck’s laboratory distribution business, VWR International, in a stock purchase agreement worth $1.68 billion.

The agreement is subject to regulatory approval and closing of the transaction will take place as soon as all necessary approvals have been granted.

On April 1, Merck will combine its Analytics & Reagents and Life Science Products divisions into a new Life Science & Analytics division. This division will then enter into a long-term distribution agreement with VWR to distribute Merck’s laboratory products.

With 5,880 employees and annual sales of approximately 2.4 billion Euros, the West Chester, PA-based company is a leading distributor of laboratory products. VWR’s 750,000 products range from test tubes to fully equipped laboratory clean rooms and biologic materials for drug development.

‘The sale of VWR will give Merck much better margins and allow it to better focus on its core businesses of pharmaceuticals and chemicals,’ said Merck’s CEO Bernhard Scheuble. ‘This cash infusion will make Merck almost free of financial debt and give it the flexibility to expand its core businesses if opportunities should arise.’

The Laboratory Distribution business accounted for 33% of the Merck Group sales in 2003 and 11% of its operating result.

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