Just a few weeks ago, a potential billion-dollar takeover from Merck electrified investors. At the start of the week, however, disillusionment sets in.
• Merck & Co. ends takeover negotiations due to price differences
• Revolution market valuation increased significantly due to takeover speculation
• Future uncertain – talks could be resumed or new bidders could come
According to press reports, the pharmaceutical giant Merck & Co. wanted to put between 28 and 32 billion US dollars on the table for the cancer drug specialist Revolution Medicines. This would have been one of the largest transactions in the pharmaceutical sector in recent years. But that obviously won’t happen.
Conversations ended for now
As the Wall Street Journal reported on Sunday, Merck has now broken off takeover talks for the time being. According to people familiar with the matter, an agreement failed primarily due to different price expectations. Revolution Medicines had a market capitalization of about $16 billion before the first takeover rumors, but after Merck’s interest became known, the valuation rose to over $20 billion.
Merck has to change strategy
For Merck, the takeover would have been a significant step in strengthening its own oncology portfolio. For the pharmaceutical giant, the strategic task of further strengthening its own cancer therapy portfolio through collaborations and acquisitions remains, while Revolution, as an independent biotech company, initially continues to focus solely on the clinical development of its promising oncology programs – accompanied by the open question of whether and when a new attempt at a billion-dollar deal will follow, because, according to the report, observers do not rule out that the talks will be resumed at a later date or that other large pharmaceutical companies that had already previously signaled interest will take advantage of their opportunity push into the gap.
Investors are likely to send Revolution shares downwards
Just as Revolution Medicines shares reacted to Merck’s billion-dollar takeover interest with a jump in price a few weeks ago, they are likely to suffer heavy losses on Monday. On Friday, shares on the NASDAQ closed 0.99 percent lower at $117.63, while Merck shares ended trading on the NYSE 0.92 percent lower at $108.18. Revolution Medicines shares temporarily lost 17.05 percent to $97.57 in trading. Merck’s shares are now down 0.78 percent to $107.34.
Editorial team finanzen.net
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