Bio-Rad and Qiagen in Merger Talks?

12.10.2022 - Bio-Rad Laboratories is in talks to merge with fellow life-sciences company Qiagen in a deal that could be worth more than $10 billion, US business newspaper Wall Street Journal has reported, citing “people familiar with the matter.”

Talks between the companies headquartered in the US and the Netherlands respectively have been in progress for some time, but an agreement, if it comes, should not be expected for several more weeks, the paper said.

The mooted transaction, if successful, would be the biggest since Ilumina paid $7.1 billion last year to take over Grail, a company that sells diagnostic blood tests for cancer in a market potentially worth $50 billion worldwide.

Despite opposition from the US Federal Trade Commission and the European Commission, which both said it would stifle competition, the Illumina-Grail deal went ahead.

Plans by Thermo Fisher Scientific to acquire Qiagen, a global provider of molecular diagnostics and sample preparation technologies, in early 2020 fell apart as shareholders opposed even a sweetened offer. The initial bid valued the company at only $11.5 billion, with assumption of some $4 billion in debt

A year later, Thermo Fisher paid about $17 billion to acquire for contract research firm PPD, whose major shareholders included private equity investors.

On Oct. 10 just before the latest news broke, Qiagen had a market value of nearly $10 billion. Bio-Rad’s market value sank to $11.6 billion as its class A common shares fell 8.4% to $392.95 following the WSJ report.

The Hercules, California-based company manufactures products for life-science research and clinical diagnostics. Its customers include university and research institutions, hospitals, public health and commercial laboratories as well as biotechs and drugmakers. In 2021, Bio-Rad counted 7,900 employees and sales revenue of $2.9 billion.

Although a Dutch holding, Qiagen has dual commercial headquarters in Hilden, Germany, and Germantown, Maryland, US. The company with more than 6,100 employees at over 35 worldwide locations has developed technologies to isolate and process DNA, RNA and proteins from blood, tissue and other materials.

The medical diagnostics sector has seen enhanced activity since the beginning of the coronavirus pandemic, but analysts told Wall Street Journal that it is now a buyer’s market as rising interest rates and rampant inflation have caused valuations to plummet and financing to freeze up amid uncertainty about the state of the economy.

Last year it was a different story. The sector saw nearly $6 trillion spent in transactions globally, with almost half of that sum in the US. This was attributed in part to government stimulus and looming tax changes.

Author: Dede Williams, Freelance Journalist