Merck KGaA Crashes Into The Versum-Entegris Tie-Up

I liked both Versum (VSM) and Entegris (ENTG) in the fall of 2018, Entegris a little moreso, on the idea that the market was overreacting to the correction cycle in semiconductors and semiconductor equipment and that underlying chip production (a key driver for Versum) was unlikely to be impacted as much as seemed to be reflected in the prices. When Versum and Entegris announced their intent to merge in late January, I thought it made a lot of sense and would create a stronger new company, led by management team (Entegris) with a lot of experience in M&A integration.

Now Merck KGaA (OTCPK:MKKGY) has pushed itself into the conversation, making an unsolicited all-cash offer that is well above the upfront value offered by the Entegris deal. Although I can see why some shareholders may prefer a stock-for-stock bid and I believe there are some regulatory risks to the Merck KGaA offer, it’s hard to argue with an all-cash offer that is well above what Versum shareholders were otherwise expecting.

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Merck KGaA Crashes Into The Versum-Entegris Tie-Up