Merck To Buy Cubist Pharmaceuticals In $9.5 Billion Deal

Cubist Pharmaceuticals announced on Monday an agreement to be acquired by Merck & Co. in a deal valued at $9.5 billion, including $1.1 billion in debt. The per-share purchase price of $102 represents a 37% premium to Friday's closing price of Cubist's stock. Cubist's stock, which are currently halted for trading, had surged 34% in premarket trade just prior to the halt. Merck's stock edged up 0.2% ahead of the open. "Cubist is a global leader in antibiotics and has built a strong portfolio of both marketed and late-stage pipeline medicines," said Kenneth C. Frazier, Merck's chief executive. "Combining this expertise with Merck's strong capabilities and global reach will enable us to create a stronger position in hospital acute care while addressing critical areas of unmet medical need, such as antibiotic resistance." Merck expects the deal to add $1 billion of revenue to its 2015 base. Through Friday, the shares of Cubist had gained 8% year to date, while Merck's stock had rallied 23% and the S&P 500 had advanced 12%.

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