As you may recall, Merck KGaA, Darmstadt, Germany first announced that it planned to acquire Sigma-Aldrich back in September 2014, but the approximately $17-billion deal took more than a year to close. Once it did, Germany-based Merck KGaA (which is, we’d like to point out to prevent confusion, a completely separate company from U.S.-based Merck & Co.) combined Sigma-Aldrich with EMD Millipore to form MilliporeSigma, which is (as EMD Millipore was before) the life science business of Merck KGaA.Earlier this year, DDNews and representatives of Merck KGaA explored the idea of discussing the progress made since the creation of MilliporeSigma, under which the Sigma-Aldrich and EMD Millipore brands still operate, and so comes about this Q&A with Klaus-Reinhard Bischoff, head of the Global Research & Applied Solutions Commercial area of MilliporeSigma..
DDNews: How has the acquisition of Sigma-Aldrich and its merger into the Merck KGaA family gone—both in the initial stages and in more recent months?
Klaus-Reinhard Bischoff: The acquisition, which as the largest in the history of Merck KGaA, Darmstadt Germany, went extremely well. When Merck KGaA acquired Sigma-Aldrich, we began offering more than 300,000 life-sciences products. The combination of the two companies was built on complementary strengths and enables us to serve our customers—from basic researchers to pharmaceutical manufacturers—even more efficiently. The success of the acquisition shows in the numbers. In the second quarter, we grew faster than the market with net sales of €1.43 billion, and our sales grew by 10.2 percent pro forma* in the first half of 2016. This is a strong performance, with quality growth as we continue to integrate the legacy businesses.
DDNews: Any surprises—big or small—that are interesting to note about the integration of the two companies into one, whether positive, negative or neutral surprises?
Bischoff: We have not encountered any negative surprises; overall, the integration process and reactions from the market are very positive. We have focused on ensuring a seamless transition for our customers, creating a customer-focused organization and integrating all critical systems. Our organization is leveraging the top talent of both legacy organizations, with a focus on continuous innovation and strengthened capabilities. Our customers have had positive feedback in terms of the combination of the companies.
DDNews: Would you call the acquisition process “complete” at this point or still a bit of a “work in progress?”
Bischoff: The acquisition is complete; however, the integration of the two businesses is ongoing. We have made significant progress in key areas. We have focused the organization from product-centric to customer-centric. We now have three distinct business segments: Research Solutions, Process Solutions and Applied Solutions. Another area where we have made meaningful progress is on e-commerce. In the U.S. and Europe, many of our MilliporeSigma products are now available on our industry leading e-commerce site, Sigma-Aldrich.com. The end goal is to have our full portfolio combined on the web platform.
DDNews: What have been the most notable and substantive changes made to Sigma-Aldrich and or to EMD Millipore during the integration?
Bischoff: In addition to our ability to rapidly accelerate scientists’ access to antibodies, solutions and cell culture reagents with one click on the Web, we have restructured the entire business from product-focused to customer-focused.
DDNews: From a strategic standpoint in the executive offices and boardroom of the parent company, Merck KGaA, or even more “locally” with MilliporeSigma, how critical has the goal of expanding business into North America and increasing your presence in Asia been in your integration plans? And how has that played out in any specific strategies or decisions you made during the merger process?
Bischoff: Sigma-Aldrich has been a trusted source of high-quality scientific tools, chemicals and kits for researchers around the world and the acquisition has opened doors in the research market in North America and Asia. One recent investment in North America is that we are building a new $115-million campus in Burlington, Mass., that will serve as a major life-sciences hub in North America. This location will become a global customer destination.
DDNews: Any significant deal-making, R&D or anything else you’d like to mention quickly that have occurred since the acquisition of Sigma-Aldrich?
Bischoff: Innovation is core to delivering value to our customers, and MilliporeSigma has more than 650 employees working in various R&D functions around the world. Our ultimate objective is to solve the toughest problems in life sciences by translating ideas into innovative products. Innovation for our customers is the heart of what we do and Q2 was no exception. We launched 20 new products including:
- CRISPR plant products for crop breeding—allow faster development and production of new crop varieties.
- CellASIC ONIX2 Microfluidic System—gives researchers precise environmental control over live cells with easy-to-use live cell imaging.
- Lynx CDR connectors—provides customers a fail-safe alternative to time-consuming tube welding processes and costly manifold configurations traditionally used in upstream and downstream processing.
- ELIX Lab Water System—provides laboratories with a reliable, high-throughput water purification solution for daily water volumes of up to 9,000 liters.
DDNews: What are some of the strategic plans and/or changes being planned or toyed with more long-term and what is the thinking behind them?
Bischoff: We do have a long-term strategy in place that supports our purpose—we collaborate with the global scientific community to accelerate access to health for people everywhere. That’s our promise. We are singularly focused on solving the toughest challenges in life sciences. We want to collaborate with our customers both commercially and scientifically. We want to be a solution provider for our customers offering the key workflow solutions for our customers. Solutions for us means both product solutions and also the right technical service.
DDNews: Any ways that you haven’t already mentioned in which the combination of Sigma-Aldrich and EMD Millipore has improved the overall Merck KGaA company and brand?
Bischoff: With the combination, we have an industry-leading e-commerce platform—SigmaAldrich.com. This world-class platform simplifies the ordering process for our customers and allows them to order a product and have it delivered within 24 hours in many markets. Our vision has been to provide even more value to our customers, and we are doing that by providing a broader portfolio of products, greater reach and an unmatched combination of industry-leading capabilities. We are delivering the promise by ensuring both the how and what we deliver for our customers is delivered with quality and reliability that includes bringing to market a continuous stream of innovations and new products.
DDNews: How has the combination been received overall by the pharma/biotech industry?
Bischoff: The combination has been well-received in the biopharmaceutical industry. Having two of the industry-leading companies come together and offer a combined portfolio across the entire biopharma production chain is quite an accomplishment.
DDNews: Anything else you’d like to add in closing?
Bischoff: At MilliporeSigma, we are all problem solvers. We work hand-in-hand with our life-sciences customers globally to advance research and development, manufacturing and diagnostic solutions. We’re supporting some of the most exciting and promising work in life sciences. With our comprehensive portfolio, we are helping to progress scientific discovery and ultimately contributing to advancements in health. We look forward to continuing to work with the scientific community to solve the toughest problems in life sciences.
*Pro forma financial figures assume that legacy EMD Millipore and legacy SIAL were one company in 2015, in order to provide a like-for-like comparison of our 2016 performance