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Investing.com-- German biopharma firm Merck KGaA (ETR:MRCG) said on Monday it had entered a definitive agreement to buy U.S.-based peer SpringWorks Therapeutics Inc (NASDAQ:SWTX) for an equity value of $3.9 billion, after it last week confirmed it was in late-stage talks over the deal.
Merck said in a press release it will pay about $47 for each share in Springworks, representing a premium of roughly 5% over SpringWorks’ Friday close. The figure values Springworks at about $3.9 billion.
The German biopharma firm said the deal was a step towards diversifying its portfolio and increasing its presence in the United States.
“Beyond this planned transaction, we will continue to explore M&A opportunities across our three complementary business sectors, always with a firm focus on strategic fit, financial robustness, and long-term value creation,” Merck Chair and CEO Belen Garijo said.
Merck had last week confirmed it was in late-stage talks with Springworks over the deal. The acquisition is centered around Springworks’ large drug portfolio, which is expected to help spruce up Merck’s sales, especially as demand for its cancer drug Bavencio slowed in recent quarters. Merck also faces a loss of exclusivity for several other drugs, which present earnings headwinds.
Springworks focuses on drugs to treat rare cancers and genetic disorders. Its genetic disorder drug Gomekli was approved by the U.S. Food and Drug Administration in February.
Reports of Merck’s takeover plans had first broken in February this year, sending Springworks’ shares as high as $61.