By Divya Chowdhury and Mehnaz Yasmin
DAVOS, Switzerland (Reuters) -The CEO of Germany’s Merck KGaA on Thursday said a recovery in sales growth at its existing business means it can take a cautious approach to buying other companies, which are expensively priced.
“We need to stay prudent and patient because our business is returning to growth organically. We are not in a rush,” CEO Belen Garijo told the Reuters Global Markets Forum on the sidelines of the World Economic Forum’s annual meeting in Davos, Switzerland.
Pharma and technology company Merck is particularly focused on strengthening its Life Science unit, which makes lab gear and supplies, but asset prices when measured as a multiple of earnings are high, she added.
“We’re not planning any transformational deals in pharma,” Garijo said, adding that Merck is looking at bolt-on acquisitions of a smaller size and later-stage deals.
Bolt-on acquisitions are often used by major companies to quickly expand their portfolios with specialized therapies or innovative technologies to strengthen their competitive edge. Such deals have seen a notable increase in the pharmaceuticals industry with several big pharma players including AbbVie and Eli Lilly eyeing smaller deals.
“We have announced a number of bolt-ons in life science, and we continue to look at Europe, China and the U.S,” Garijo said.
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(Reporting by Divya Chowdhury in Davos and Mehnaz Yasmin; Writing by Ludwig Burger; Editing by Friederike Heine and Nia Williams)
