Merck Sells Its CDMO Business to Lonza
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Germany's Merck is streamlining its portfolio in the Life Science division and selling its CDMO business to Swiss competitor Lonza.
Merck has signed a binding agreement to sell its CDMO business in the Life Science division to Lonza for a mid-three-digit million-euro amount. The sale of the activities related to custom contract development and manufacturing of pharmaceutical substances and products is intended to sharpen Merck’s portfolio in line with its medium- to long-term strategic direction and focus it on innovation-driven businesses with high value-creation potential.
At Lonza, the CDMO business will become part of an organization that focuses specifically on contract development and manufacturing (CDMO: Contract Development and Manufacturing Organization). The transaction, which is subject to customary regulatory approvals and other closing conditions, is expected to close in mid-2027.
The CDMO business provides development and manufacturing services for complex modalities. It supports customers in advancing therapies from development through production. The planned transaction includes the CDMO operations at five sites in the U.S. Of the five manufacturing sites that Lonza is acquiring from Merck, four trace directly back to Sigma-Aldrich and its CDMO division, SAFC. As part of Merck’s acquisition of Sigma-Aldrich in 2015, the Darmstadt-based life sciences group not only acquired the U.S. company’s renowned laboratory chemicals business but also significantly expanded its CDMO business through Sigma-Aldrich’s production network, which includes facilities in Carlsbad, CA, Madison, and Verona, WI, as well as at the SAFC headquarters in St. Louis, MO. The fifth site, Indianapolis, IN, was added to Merck’s portfolio in 2022 through the acquisition of the U.S. company Exelead.
Kai Beckmann, Chairman of the Executive Board and Group CEO of Merck, explained: “As announced in our strategy update in May, we are consistently aligning our portfolio with innovation-driven businesses. These build on our core competencies and strengthen our long-term competitive position both in the Life Science sector and company-wide. At the same time, we are connecting capabilities across Merck, thereby strengthening our unique market position as an integrated science and technology company.”
Wolfgang Wienand, CEO of Lonza, stated: “By integrating Merck’s CDMO business into Lonza, our customers will gain access to a broader range of services and additional production capacity in the U.S., an important market for Lonza.”
Merger & Acquisitions (M&A)
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