Thermo And Fisher Agree To Join Forces

Thermo Electron and Fisher Scientific have agreed to combine into a new company, Thermo Fisher Scientific, that they say will be the leading provider of laboratory products and services in the life, laboratory, and health sciences industries.

The deal calls for Thermo, the smaller of the two firms, to acquire Fisher for $10.6 billion in stock and to assume $2.2 billion in net debt. The transaction is expected to close in the fourth quarter of this year.

The companies say their strengths complement each other???s. Thermo has a strong position in the laboratory equipment, instrumentation, and software markets, while Fisher is a leader in reagents, consumables, and laboratory services.

The deal is being handled as a stock swap, with Fisher shareholders receiving two shares of Thermo common stock for each share of Fisher stock. As a result, Thermo shareholders will own about 39% of the company, and Fisher shareholders about 61%.

Marijn E. Dekkers, president and CEO of Thermo, will become president and CEO of the combined company, which will be headquartered in Waltham, Mass., where Thermo is now based. Paul M. Meister, vice chairman of the board of Fisher, will become the chairman of the new company. The board of the new company will have eight members, five nominated by Thermo and three by Fisher. Paul M. Montrone, current chairman and CEO of Fisher, will step aside after the merger is complete, but he will remain as an adviser to the company.

Thermo Fisher is expected to have more than $9 billion in revenues next year and cash flow upward of $1 billion. The combination will have 30,000 employees, including a global sales force of 7,500 people. The companies anticipate $200 million in ???synergies,??? including $150 million in cost savings and $50 million in revenue opportunities from cross-selling and enhanced geographic reach.