German drugs and chemicals company Merck (MRK.DE) said it is not planning to engage in any big takeovers until 2022 and would instead work on reducing its debt, accumulated from the takeover of Versum. Merck completed its $6.5bn (£5.05bn) takeover of US electronic materials company Versum in 2019.
Any new acquisitions they make will be smaller ones, Merck’s chief executive Stefan Oschmann said.
“We don’t rule out large transformative deals as of 2022, yet in view of our strong business portfolio, at present the likelihood is higher that we will complement our businesses through a number of smaller to medium-sized acquisitions after 2022,” Oschmann said in a statement.
In May this year, Merck agreed to acquire privately-owned Themis Bioscience, an Austrian pharma company working on development of a COVID-19 vaccine.
Merck’s products and services for drug manufacturing and its semiconductor business are expected to drive growth for the company in the coming year.
Oschmann said that the group plans to generate around €2bn in sales via new products in the pharmaceutical sector in 2022.
The company is maintaining its 2020 forecast for sales of between €16.9bn and €17.7bn and adjusted operating profit (Ebitda) of between €4.45bn and €4.85bn.
Germany tightened its foreign investment laws in April to give it increased powers to block potential hostile foreign takeovers of its key industries during the coronavirus pandemic. The law changes will give the government more scope to protect key industries such as tech and robotics from strategic investments, such as from state-owned Chinese companies.
The government will now be able to intervene earlier at a lower equity threshold to prevent or put on hold acquisitions from non-EU countries that could lead to “likely interference” in public order or security.