Merck KGaA has entered into an agreement to purchase Serono shares for $13.3 billion in cash, as part of an effort to create a strategic combination. Subject to antitrust review and closing of the purchase, Merck will hold 64.5% of the capital of Serono and 75.5% of the voting rights. Together with Serono, Merck adds R&D capabilities, a multiple sclerosis franchise, expanded geographic reach with access to the U.S. market, and biotechnology manufacturing.

“This acquisition transforms Merck’s pharmaceuticals business and creates a leading position in the world of biologic medicines, which helps to ensure its future through the 21st century,” said Michael Roemer, chairman of the executive board of Merck KGaA. “Both companies have a unique opportunity to achieve a competitive advantage through a combined $1.25 billion R&D budget and a stronger product portfolio. The companies are a perfect fit with 28 compounds in development. Together with Serono management and employees, we will create a world-class biopharmaceutical company with global footprint, cutting-edge biotechnology manufacturing and strong growth.”

Ernesto Bertarelli at Sorono said, “With this transaction we create a combined business with strong capabilities, especially in neurology and oncology. Together with Serono, Merck will be a world-class biotechnology company and a major player in the global pharmaceutical market. This match will allow Serono’s innovative biotech abilities to play an important role in the future of the combined company while expanding its global reach.”

Merck’s Pharma Ethicals division will be combined with Serono to create Merck-Serono Biopharmaceuticals. The headquarters of this business will be in Geneva, Switzerland. Merck-Serono Biopharmaceuticals’ U.S. headquarters will be in Boston, MA. The Merck Group will have a total of 35,000 employees.