The deal has an equity value of $8.4 billion and has $1.1 billion in net debt, the companies said in a statement. As a result of the agreement, Merck will acquire the Lexington, Mass.-based pharmaceuticals company for $102 per share, a 35% premium over Cubist's five day trading average. Cubist has a market cap of $7.69 billion.
The transaction has been structured as a two-step deal with a tender offer to acquire all Cubist shares. Subject to certain conditions, including a majority of the Cubist's shareholders accepting the tender offer and the expiration of the antitrust waiting period, there will be a second-step merger without the need for a stockholder vote required by Delaware law.
Cubist recently has been active in the acquisition market itself, after committing $1.6 billion to acquire Trius Therapeutics Inc. for $818 million and Optimer Pharmaceuticals Inc for $801 million in deals announced this summer. The deals were structured to aggressively expand its acute care product portfolio — a portfolio that attracted Merck to Cubist.
Merck is focused on the acute care area within the hospital setting, the Monday statement said. Over the course of the first three quarters of this year, the company's hospital acute care portfolio grew by more than 10%, buoyed by its antibiotics and antifungals and several candidates to treat conditions such as C. difficile, a digestive tract disease that is common in hospitals and can be potentially be life threatening.