The chemical business based in South Korea, which employs around 100 people, primarily develops and produces precursors used in thin film deposition.

Merck said the planned acquisition is part of the “Level Up” growth program for its Electronics business segment, which will see investment of “significantly” more than €3 billion up to 2025 in innovation and capacity. The program focuses on four mutually reinforcing key priorities: scale, technology, portfolio and capabilities.

To clinch the deal for the Mecaro unit, expected to be finalized in the 2022 fourth quarter subject to regulatory clearance and other customary closing conditions, Merck will pay €75 million in cash upfront and subsequently make milestone payments of as much as €35 million, yielding an aggregate transaction value of up to €110 million.

Adding Mecaro’s capabilities will allow the Darmstadt-based group to continue expanding a key segment of its Semiconductor Solutions portfolio, said Kai Beckmann, member of the Merck executive board and CEO Electronics.

The Korean business “very nicely” complements Merck’s own broad Semiconductor Solutions portfolio, Beckmann said, adding that the combination of Mecaro’s competence in Thin Films technology with the German group’s global footprint will provide customers with additional value.

Merck has the necessary scale to successfully drive this business to the next level, JaeJung Lee, president and CEO of Mecaro, commented.

With the purchase, Merck said it is simultaneously building on its localization efforts. From Mecaro, it will gain a state-of-the art production facility in Eumseong and an R&D lab in Daejoen, both in South Korea. Beckmann said these two turnkey spaces will be “one of the crucial elements in executing our Level Up investments Korea.”

Author: Dede Williams, Freelance Journalist