Merck moving US base to Billerica
Millipore deal also expected to bring new jobs to state
The chairman of German drug and chemical giant Merck KGaA said yesterday that he plans to move the headquarters of the company’s US chemicals business, which sells lab materials, life sciences tools, and pigments, to Billerica from outside Philadelphia.
That division will be named EMD Millipore once Merck has completed its $6 billion acquisition of Billerica life sciences toolmaker Millipore Corp. in the coming months, Merck chairman Karl-Ludwig Kley (pronounced kly) said during an interview at the Globe. But he would not specify how many new jobs could be created in Billerica.
Kley said the company determined over the past decade that it needed to build up its presence on this side of the Atlantic. The Millipore deal marks its second big US acquisition, both of which were in Massachusetts.
“We have a US strategy, but I have to admit we have no Massachusetts strategy,’’ he said. “That everything we do turns out to be in Massachusetts is good luck for us and for Massachusetts. I think it has, of course, to do with the fact that Massachusetts is an extremely attractive state to do business for research or innovative companies.’’
Governor Deval Patrick, who met with Kley yesterday, hailed Merck’s move as a vote of confidence in the state’s efforts to expand its life sciences sector. Patrick said Kley did not seek state government assistance and promised to bring some European operations under the umbrella of the Billerica unit.
“They’re great jobs, they’re coming in,’’ Patrick said. “We need them now, I was quite clear with him about that. We want any and all life sciences companies that want to set up operations here. This is affirmation and confirmation that we are the life sciences hub.’’
Merck spokesman Walter Huber confirmed that “global responsibility’’ for some overseas operations will be coming to Massachusetts, but did not say how many, if any, jobs might be created. Merck currently sells its own line of life sciences tools in Europe, Asia, and Latin America.
With its agreement this week to purchase Millipore - in a deal stock analysts valued at $7.2 billion including the assumption of debt - Germany’s Merck will emerge as a significant employer in eastern Massachusetts and southern New Hampshire. The company, established in 1668, calls itself the world’s oldest pharmaceutical and chemical company. It is not connected to US-based Merck & Co. and until recently has not been well-known in the United States.
In 2006, it paid $13 billion to buy Swiss-based drug maker Serono AG, which has its US headquarters in Rockland. Merck has since boosted Serono’s Massachusetts employment from 500 to 850 jobs and moved its US biopharmaceutical headquarters to Rockland, naming that division EMD Serono Inc. Merck has to do business in the United States under the name EMD - which stands for “Emanuel Merck, Darmstadt,’’ the initials of a company executive and the German city where it is based - because America’s Merck owns exclusive rights to the name here.
Millipore has more than 6,000 workers worldwide, including 1,676 in this region: 585 in Billerica, 403 in Bedford, 159 in Danvers, 56 in Burlington, and 473 in Jaffrey, N.H. The company sells a range of filtration systems and other life sciences equipment to biotechnology, pharmaceutical, and academic research laboratories.
Kley said Merck is likely to transfer an unspecified number of jobs to Billerica from Gibbstown, N.J., outside Philadelphia. That site has about 300 employees. But he said it was also possible the company could consolidate some operations, and eliminate jobs, though it has yet to be determined how many and where. Merck has said it wants to retain Millipore’s senior management team, but its executives are still discussing whether Martin D. Madaus, Millipore’s German-born chief executive, will remain with EMD Millipore.
In a whirlwind series of meetings yesterday, Kley introduced himself to Millipore workers and hosted a town meeting at the company’s Billerica offices, in addition to meeting with Patrick and other state officials.
Patrick said it was plain from his talks with Kley that Merck intends to expand employment in the state. “My takeaway is they’re looking to consolidate operations they have in other places here in Massachusetts,’’ he said. “They’re looking to grow in the place that has the intellectual capacity to allow that growth.’’
State officials were clearly relieved with the outcome of Millipore’s auction. The company was reported to have received a rival takeover bid from Thermo Fisher Scientific Inc. of Waltham, a deal that might have eliminated some jobs in the state because of overlapping operations.
Kley stopped short of predicting a large increase in Massachusetts jobs. But he said the agreement to buy Millipore was driven by Merck’s need to expand in the United States and North America.
“Our presence was not sufficient for the biggest and most important pharmaceutical and chemical market in the world,’’ the Merck chairman said. “Acquisitions are part of our growth strategy. And when we looked at the acquisition criteria, a strong footprint in the US was one of the key elements to go forward with an acquisition.’’
Initially, the US-based Merck was a subsidiary of the 350-year-old German company, started by a Merck family member who immigrated to the United States in the 1800s. But the US government took over the company after World War I and converted it into an independent American firm. It has since expanded into a global biopharmaceutical giant, dwarfing Germany’s Merck.
Asked if his strategy might extend to reacquiring the US Merck, Kley chuckled. “I’m audacious, but not stupid,’’ he said.
Robert Weisman can be reached at email@example.com.