Germany's Merck KGaA to acquire Sigma-Aldrich for $17B

The other Merck said Monday that it would spend $17 billion to buy the chemical company Sigma-Aldrich Corp., based in St. Louis.

Merck KGaA of Darmstadt, Germany, made Monday's announcement.

Merck & Co. is based in Whitehouse Station, N.J., and has a big operation in Montgomery County.

Both companies make pharmaceutical products. They are separate corporations now, but it was not always so.

Amid the death, destruction, and fear of foreigners during World War I, the U.S. government announced in 1917 that it would seize several companies with German connections. One was Merck.

A split of company assets ensued, leading to two global companies with awkwardly similar names - Merck KGaA and Merck & Co. - and agreements to call themselves other things depending on geography.

Merck & Co. is known by that name in the United States and Canada. But elsewhere it is known as MSD, short for Merck Sharp & Dohme Corp.

Merck KGaA, as it proudly explains on its website, is the original Merck and is known by that name around the globe - except in North America, where it goes by EMD, which stands for "Emanuel Merck Darmstadt." (KGaA is the abbreviation for Kommanditgesellschaft auf Aktien, a German partnership limited by shares.) The Merck family owns about 70 percent of the company, according to its website.

The original company was founded in 1668 in Darmstadt, south of Frankfurt. It established a New York office in 1887 and its Merck & Co. subsidiary in 1891.

With Monday's acquisition, pending completion, Merck KGaA will expand in the United States, somewhat in the pharmaceutical sector. Sigma-Aldrich generated $2.7 billion in revenue in 2013 by selling chemical and biochemical products, kits and services to laboratories, and pharmaceutical producers.

Bloomberg News reported that Merck KGaA got 58 percent of its revenue from pharmaceuticals last year, while chemicals accounted for 39 percent. The company's chemicals include liquid crystals used in flat-screen televisions.

"They seem to be backing away from drug development, which they haven't been successful in for the last few years," said Asthika Goonewardene, an analyst with Bloomberg Intelligence in London.