Merck buying Cubist Pharmaceuticals for $8.4 billion, will help address antibiotic resistance

MarketsAssociated Press

Merck is buying Cubist Pharmaceuticals for $8.4 billion, illustrating a new emphasis on combating so-called "superbugs" that are drawing dire warnings from global health organizations.

Cubist Pharmaceuticals Inc. does advanced antibiotic research.

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The World Health organization warned in April that without a coordinated effort, "the world is headed for a post-antibiotic era, in which common infections and minor injuries which have been treatable for decades can once again kill."

To accelerate its entry into that market, Merck & Co. said Monday that it will pay $102 per share of Cubist, a 37 percent premium.

Merck expects the deal to add more than $1 billion of revenue to its 2015 base and it's expected to significantly add to profit in 2016 and beyond.

The transaction includes $1.1 billion in debt.