German Merck Acquires Firms, Expands Presence in Israel

The German pharmaceutical and chemicals firm said it would be acquiring Israel’s Qlight Nanotech and U.S. laboratory equipment maker Sigma-Aldrich Corp.

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Merck KGaA (MRCG.DE) expects to expand its presence significantly in Israel with two acquisitions in the life science and performance materials sectors, the company's chief executive said on Monday.

The German pharmaceutical and chemicals firm earlier said it was acquiring the remaining stake in Qlight Nanotech for an undisclosed sum. Qlight's nanocrystals help to improve the color impression and energy efficiency of flat panel displays.

Qlight was founded in 2009 as a spin-off of Yissum, the technology transfer company of the Hebrew University of Jerusalem. Merck invested in the company, which employs about 20 people, in two steps in 2012 and 2013.

Qlight will remain the quantum materials research center for Merck's performance materials division, which accounted for 18 percent of Merck's sales in 2014, or 2.1 billion euros ($2.3 billion), CEO Karl-Ludwig Kley told reporters in Tel Aviv.

In addition, once Merck's $17 billion acquisition of U.S. laboratory equipment maker Sigma-Aldrich Corp (SIAL.O) is approved by regulators, it will add another 250 employees at two production sites in Israel, doubling Merck's workforce in the country.

Merck Serono, the company's biopharmaceutical division, also has significant research operations in Israel, where its best-selling drug Rebif for the treatment of multiple sclerosis and its Erbitux cancer treatment were developed.

It has committed to invest up to 10 million euros in early stage biomedical companies through its Merck Serono Israel Bioincubator. Three companies have joined the incubator, including Neviah Genomics, co-founded by Merck and Israel's Compugen (CGEN.O), to develop biomarkers for the prediction of drug-induced toxicity.

"We will definitely extend our activity," Kley said. "We have room for seven or eight companies in the incubator."

($1 = 0.8966 euros)