Merck KGaA, Darmstadt, Germany, Places Hybrid Bond Amounting to € 1.5 billion

• Placement is an important part of the financing of the planned acquisition of Versum Materials, Inc.
• Tranches of € 1 billion and € 500 million placed
• Transaction significantly oversubscribed

Merck KGaA, Darmstadt, Germany, a leading science and technology company, today successfully placed a hybrid bond amounting to € 1.5 billion. The placement is part of the financing of the planned acquisition of U.S.-based company Versum Materials, Inc. (NYSE: VSM), which was announced in April 2019.

The placement comprises two tranches, both of which have a maturity of 60 years. The first tranche amounting to € 500 million pays a coupon of 1.625% and includes an early redemption option for Merck KGaA, Darmstadt, Germany, after 5.5 years. The second tranche of € 1 billion pays a coupon of 2.875 %, including an early redemption option after 10 years. Having received equity credit treatment from all three rating agencies Standard & Poor’s, Moody’s and Scope, the placement thus supports the credit rating of Merck KGaA, Darmstadt, Germany. The bond is equal in rank to the existing hybrid bonds and subordinated to all of the other existing financial liabilities of Merck KGaA, Darmstadt, Germany.

“We had secured a solid financing structure for the proposed acquisition of Versum right from the start. Today’s placement of hybrid capital shows that we remain committed to supporting our credit rating and a conservative financial policy,” said Marcus Kuhnert, Member of the Executive Board and Chief Financial Officer of Merck KGaA, Darmstadt, Germany.

The acquisition of Versum is expected to strengthen the Performance Materials business sector. Versum is a leading supplier of innovation-driven, high-purity process chemicals, gases and equipment for semiconductor manufacturing. The transaction is expected to close in the second half of 2019, subject to regulatory clearances and the satisfaction of other customary closing conditions. Versum stockholders already gave their approval at a special meeting on June 17, 2019.

The placement was significantly oversubscribed and generated strong international demand, with the majority being placed in France, the United Kingdom and Germany. The bond achieved a well-diversified distribution among a wide range of institutional investors such as fund managers, insurance companies and banks. The bookrunners of the transaction were the relationship banks of Merck KGaA, Darmstadt, Germany.

Merck KGaA, Darmstadt, Germany is rated “A” (stable outlook) by Standard & Poor’s, “A–“ (stable outlook) by Scope and “Baa1” (stable outlook) by Moody’s.