Official: Merck & Co to acquire Cubist for $8.4 billion

8 December 2014

Confirming weekend speculation and rumors, US pharma giant Merck & Co (NYSE: MRK) this morning said it has entered into a definitive agreement to acquire biotech firm Cubist Pharmaceuticals (Nasdaq: CBST) for $102 per share in cash. This represents a 35% premium to Cubist’s average stock price for the most recent five trading days. Cubist’s shares surged 36% to $101.05 at 8 am in New York.

Unanimously approved by the boards of directors of both companies, the transaction has an equity valuation of $8.4 billion and will also include $1.1 billion in net debt and other considerations for a total transaction value of around $9.5 billion. Earlier rumors had suggested Merck would pay around $7 billion. The companies expect the transaction to close in the first quarter of 2015. This is Merck’s second acquisition in the past six month, the previous one being Idenix Pharmaceuticals for $3.85 billion.

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