Merck Must Divest Lab Chemical Businesses

The European Commission has approved Merck KGaA’s $17 billion acquisition of Sigma-Aldrich on the condition that the company divest parts of Sigma-Aldrich’s laboratory solvents and inorganic chemicals businesses. The requirement is designed to protect purchasers of lab chemicals from being monopolized, but reactions by purchasers are mixed.

Merck will have to sell a facility in Seelze, Germany, where most of Sigma-Aldrich’s solvents and inorganic chemicals for Europe are produced. The firm will also have to give up the worldwide rights to the Riedel-de Haën, Hydranal, and Fluka brands. Together these brands feature thousands of reagents for applications including chromatography, microbiology, spectroscopy, and titrations.

Additionally, Merck is required to grant a temporary license for the Sigma-Aldrich brand of solvents and inorganic chemicals in Europe.

“We are relieved that we will still continue to have choice,” says Oliver Tames, founder of England-based process technology start-up IntensiChem, a regular purchaser of lab chemicals. “A significant amount of our chemical inventory has been sourced from Sigma-Aldrich.”

Caroline Briggs, director of Amici Procurement Solutions, a Scottish purchasing agency, says she is more concerned about which company will take over the businesses slated for divestment. “I felt the high degree of quality infrastructure at Merck coupled with the second-to-none delivery performance of Sigma would be a great thing for the market,” Briggs says.

The commission isn’t requiring divestments in the two firms’ bioscience products and drug raw material businesses because it sees a sufficient level of competition. Merck has already gained approval for the acquisition, announced last September, in key markets including the U.S., Taiwan, and Russia.