German pharmaceutical and technology group Merck KGaA announced on 19 October that it will acquire London-based biotech company Silence Therapeutics. Merck will pay $20 in cash for each American depositary share (ADS). The deal values the company's equity at about $1.3 billion.
Price and premium
- $20 per ADS (one ADS = three ordinary shares, or about $6.67 per share).
- A 130% premium to the closing price on 16 October and an 82% premium to the 30-day average price ($10.99).
- Enterprise value of $1.1 billion; equity value of about $1.3 billion.
Why Merck is buying
The reason is the drug candidate divesiran. It is an siRNA medicine that silences the TMPRSS6 gene in the liver. This raises levels of hepcidin, the body's main iron regulator, so the bone marrow produces fewer red blood cells. The drug is being studied in polycythemia vera, a rare blood cancer in which the body makes too many red blood cells. Divesiran has Fast Track and Orphan Drug designations from the US Food and Drug Administration.
Merck CEO Kai Beckmann said the deal strengthens the group's rare disease business, which it expanded last year by buying SpringWorks Therapeutics. Silence chairman Iain Ross said the company was sold after a competitive process and the drug will go to a company with the resources for Phase 3 trials.
When the deal closes
Silence's board approved the sale unanimously, and holders of about 14% of the votes have already agreed to vote in favour. The deal still needs approval from shareholders and the High Court of England and Wales, as well as regulatory clearance. It is expected to close in the first quarter of 2027.
