Merck KGaA. (6/18/19). "Press Release: Merck Places Hybrid Bond Amounting to € 1.5 Billion. Placement Is an Important Part of the Financing of the Planned Acquisition of Versum Materials, Inc.". Darmstadt.

	Organisation	Merck KGaA
	Group	Merck (DE) (Group)
	Organisation 2	Versum Materials Inc.
	Product	banking
	Product 2	new materials / advanced materials
	Index term	Merck (DE)–SEVERAL: credit, 201906 hybrid €1.5b bond to finance acquisition of Versum Materials Inc
	Index term 2	Versum Materials–Merck (DE): investment, 201902– unsolicited all-cash offer at $48/share by Merck
	Person	Kuhnert, Marcus (Merck (DE) 201408– CFO before CFO of Henkel Laundry + Home Care businss unit)

> Tranches of € 1 billion and € 500 million placed

> Transaction significantly oversubscribed

Merck, a leading science and technology company, today successfully placed a hybrid bond amounting to € 1.5 billion. The placement is part of the financing of the planned acquisition of U.S.-based company Versum Materials, Inc. (NYSE: VSM), which was announced in April 2019.

The placement comprises two tranches, both of which have a maturity of 60 years. The first tranche amounting to € 500 million pays a coupon of 1.625% and includes an early redemption option for Merck after 5.5 years. The second tranche of € 1 billion pays a coupon of 2.875 %, including an early redemption option after 10 years. Having received equity credit treatment from all three rating agencies Standard & Poor’s, Moody’s and Scope, the placement thus supports Merck’s credit rating. The bond is equal in rank to the existing hybrid bonds and subordinated to all of Merck’s other existing financial liabilities.

“We had secured a solid financing structure for the proposed acquisition of Versum right from the start. Today’s placement of hybrid capital shows that we remain committed to supporting our credit rating and a conservative financial policy,” said Marcus Kuhnert, Member of the Executive Board and Chief Financial Officer of Merck.

The acquisition of Versum is expected to strengthen the Performance Materials business sector. Versum is a leading supplier of innovation-driven, high-purity process chemicals, gases and equipment for semiconductor manufacturing. The transaction is expected to close in the second half of 2019, subject to regulatory clearances and the satisfaction of other customary closing conditions. Versum stockholders already gave their approval at a special meeting on June 17, 2019.

The placement was significantly oversubscribed and generated strong international demand, with the majority being placed in France, the United Kingdom and Germany. The bond achieved a well-diversified distribution among a wide range of institutional investors such as fund managers, insurance companies and banks. The bookrunners of the transaction were Merck’s relationship banks.

Merck is rated “A” (stable outlook) by Standard & Poor’s, “A–“ (stable outlook) by Scope and “Baa1” (stable outlook) by Moody’s.

For more information, please contact Gangolf Schrimpf
+49 6151 72-9591
Email

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About Merck

Merck, a leading science and technology company, operates across healthcare, life science and performance materials. Around 52,000 employees work to make a positive difference to millions of people’s lives every day by creating more joyful and sustainable ways to live. From advancing gene editing technologies and discovering unique ways to treat the most challenging diseases to enabling the intelligence of devices – the company is everywhere. In 2018, Merck generated sales of € 14.8 billion in 66 countries.

Scientific exploration and responsible entrepreneurship have been key to Merck’s technological and scientific advances. This is how Merck has thrived since its founding in 1668. The founding family remains the majority owner of the publicly listed company. Merck holds the global rights to the Merck name and brand. The only exceptions are the United States and Canada, where the business sectors of Merck operate as EMD Serono in healthcare, MilliporeSigma in life science, and EMD Performance Materials.

Record changed: 2019-07-22

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Merck KGaA. (6/18/19). "Press Release: Merck Places Hybrid Bond Amounting to € 1.5 Billion. Placement Is an Important Part of the Financing of the Planned Acquisition of Versum Materials, Inc.". Darmstadt.

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