Merck KGaA of Ger­many com­pletes deal for Ver­sum

The Morning Call - - NATION & WORLD - By Jon Har­ris

For Ver­sum Ma­te­ri­als, a year that started off with plans to merge with a U.S. ri­val ended by in­stead part­ner­ing with a Ger­man sci­ence and tech­nol­ogy com­pany.

Merck KGaA, Darm­stadt, Ger­many, on Mon­day an­nounced it com­pleted its ac­qui­si­tion of Ver­sum for more than $6 bil­lion, a deal that cre­ates a lead­ing elec­tronic ma­te­ri­als player fo­cused on the semi­con­duc­tor and dis­play in­dus­tries. Ver­sum, an Air Prod­ucts spinoff, has a world­wide pay­roll of 2,300 em­ploy­ees, which in­cludes about 500 through­out the ex­tended Le­high Val­ley re­gion.

Merck KGaA of­fi­cials did not re­spond to in­quiries re­gard­ing po­ten­tial changes to the com­pany’s Le­high Val­ley foot­print. But com­pany of­fi­cials have main­tained through­out the year that Ver­sum and Merck KGaA are com­ple­men­tary with dif­fer­ent re­gional strengths. A news re­lease Mon­day noted that Merck KGaA’s em­ploy­ment would in­crease by about 2,300 to around 56,000 across 66 coun­tries.

“By ac­quir­ing Ver­sum, we will be op­ti­mally po­si­tioned to cap­i­tal­ize on long-term growth trends in the elec­tronic ma­te­ri­als in­dus­try,” Ste­fan Oschmann, chair­man of the ex­ec­u­tive board and CEO of Merck KGaA, said in the re­lease. “At the same time, we are broad­en­ing Per­for­mance Ma­te­ri­als, bal­anc­ing our port­fo­lio with three strong busi­ness sec­tors and sharp­en­ing our strate­gic fo­cus on in­no­va­tion-driven tech­nolo­gies.”

Merck KGaA ex­pects to reach about $80 mil­lion in cost syn­er­gies by 2022. An in­vestor pre­sen­ta­tion this year noted the syn­er­gies could be achieved by in­te­grat­ing cor­po­rate and ad­min­is­tra­tive func­tions, op­ti­miz­ing the pro­duc­tion and sup­ply chain net­work and stream­lin­ing du­pli­cate struc­tures.

In the Le­high Val­ley re­gion, Ver­sum has nearly 80 em­ploy­ees in ad­min­is­tra­tive of­fices, 114 peo­ple at the com­pany’s De­liv­ery Sys­tems & Ser­vices group on Vul­tee Street in south Al­len­town, 40 em­ploy­ees in re­search and de­vel­op­ment in Breinigsvi­lle and about 260 work­ers at a $20 mil­lion re­search and de­vel­op­ment tech­nol­ogy cen­ter in Rush Town­ship, Schuylkill County, ac­cord­ing to a break­down pro­vided by Ver­sum this year.

Merck KGaA said it con­tin­ues to make progress in in­te­grat­ing the two com­pa­nies.

For ex­am­ple, Ver­sum’s busi­ness will be folded into Merck KGaA’s Semi­con­duc­tor So­lu­tions unit. Within that seg­ment will be two units: Semi­con­duc­tor Ma­te­ri­als, fo­cused on the de­vel­op­ment and com­mer­cial­iza­tion of ma­te­rial-based so­lu­tions for semi­con­duc­tor man­u­fac­tur­ers, and De­liv­ery Sys­tems & Ser­vices, fo­cused on the de­vel­op­ment and de­ploy­ment of equip­ment for semi­con­duc­tor mak­ers.

While Semi­con­duc­tor Ma­te­ri­als will be led by Anand Nam­biar, al­ready re­spon­si­ble for the Semi­con­duc­tor So­lu­tions busi­ness unit at Merck KGaA, the De­liv­ery Sys­tems & Ser­vices busi­ness will be headed by Jeff White, who comes from Ver­sum.

Merck KGaA also re­it­er­ated Mon­day that it in­tends to use Ver­sum’s head­quar­ters in Tempe, Ari­zona, as a hub for the com­bined U.S. elec­tronic ma­te­ri­als busi­ness.

Morn­ing Call re­porter Jon Har­ris can be reached at 610-820-6779 or at jon.har­[email protected]

MORN­ING CALL FILE PHOTO

Ver­sum Ma­te­ri­als has a $20 mil­lion re­search and de­vel­op­ment tech­nol­ogy cen­ter in Rush Town­ship, Schuylkill County.

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