Germany's Merck acquiring chemical business of Mecaro

Kim Woo-kyu, left, managing director of Merck Korea, and Lee Jae-jung Lee, Mecaro CEO, pose for a photo during a signing ceremony on Wednesday. [MERCK KOREA]

Darmstadt, Germany's Merck signed a definitive agreement to acquire the chemical business of Mecaro, a Pyeongtaek, Gyeonggi-based semiconductor material manufacturer.

The transaction includes an upfront cash payment of 75 million euro ($76.3 million), and earn-out payments of up to 35 million euros, according to Merck. The deal is expected to be closed by the fourth quarter of this year.

The chemical business of Kosdaq-listed Mecaro, which has about 100 employees, develops and produces chemical precursors for semiconductors. A chemical precursor is a critical material used in thin film deposition during the semiconductor manufacturing process.

The acquisition is part of Merck’s “Level Up” growth program, which includes investments of over 3 billion euros from 2021 to 2025 in the electronics business sector.

“In acquiring this portion of Mecaro’s business, we will continue to expand a key segment of our semiconductor solutions portfolio,” said Kai Beckmann, executive board member of Merck and CEO of the company’s electronics business.

“Simultaneously, we are building on our localization efforts and gaining a state-of-the-art production facility in Eumseong and an R&D lab in Daejeon, both supporting our capacity expansion plans.”

The companies held a signing ceremony on Wednesday, with Kim Woo-kyu, managing director of Merck Korea, Lee Jae-jung Lee, Mecaro CEO, Surésh Rajaraman, head of thin film business at Merck Group and Kevin Gorman, Merck’s head of global semiconductor supply chain management division in attendance.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]