Merck KGaA says it'll consider 'larger-scale' acquisitions from 2023 onward

Merck KGaA has been investing heavily in its biopharma business as part of an effort to grow to 25 billion euros in global revenues by 2025. Starting next year, its expansion campaign could include M&A.

In a statement ahead of its capital markets day, the global conglomerate said it will consider "larger-scale" acquisitions beginning in 2023. Looking forward, the company expects to generate 80% of its growth from its "Big 3" businesses, which are process solutions and life science services, new healthcare products and semiconductor materials.

Already, Merck KGaA has been investing to support its life science arm MilliporeSigma, most recently with the opening of a new facility in France. The move comes amid a five-year push by the company to increase sales from 19.7 billion euros in 2021 to 25 billion euros by 2025.

Aside from the investment in France, Merck KGaA's MilliporeSigma in June opened a $65 million high-potency active pharmaceutical ingredient site in Wisconsin. In May, the company unveiled a 440 million euro investment in Ireland.

Also ahead of its capital markets day, Merck KGaA said it expects sales growth of 7% to 10% for its life science services business. Merck KGaA stressed that the forecast accounts for a "complete absence” of pandemic-related manufacturing demand.

For healthcare, the company expects annual sales growth in the mid-single-digit percentage range thanks to new medicines and potential launches, including multiple sclerosis drug evobrutinib and head and neck cancer therapy xevinapant.

As for M&A, Merck KGaA is currently expanding its semiconductor unit with an acquisition of the chemicals business of Mecaro, a Korean supplier for the semiconductor industry.

In healthcare and life sciences, the company should have plenty of competition on the M&A scene. Pfizer has been on an acquisition tear thanks in part to its huge COVID-19 vaccine windfall, and Merck CEO Robert Davis last year said he was interested in "all forms" of M&A deals, among other drugmakers with dealmaking firepower.