Merck Sees Chemical, Pharma Acquisitions

Merck KGaA has mulled acquisitions in both the pharmaceutical and chemical industries and has sufficient funds for big targets, its chief executive told a German newspaper.
"In principle, I can very well imagine acquisitions in both areas - in the pharma and chemical sectors," Karl-Ludwig Kley told the Sueddeutsche Zeitung in a recent interview. Kley said that the company had enough funds to finance small as well as big acquisitions, but did not specify. "But it also needs to fit," he said.
The head of Merck's pharmaceuticals unit, Elmar Schnee, had told Reuters in September the company aims to boost its drugs pipeline by acquiring rights to drug candidates or buying smaller research-based companies, with such projects accounting for 30% of total expenses for research and development. He then said that the company does not need "another Serono," referring to the 2007 takeover of Swiss biotech company Serono for €10.3 billion.
Merck is also the world's largest maker of liquid crystals (LC) for flat-panel displays and expects a full-year EBIT margin at its LC unit of 30% percent, far below margins of about 50% seen in 2008. "Operating margins that are constantly above 50% are not possible ... I rule out that we return to those regions," Kley said, but he added he was convinced that the margin would rise again in 2010 from the current 30%.