MERCK Kommanditgesellschaft auf Aktien (DB:MRK) offered to acquire remaining 99.99% stake in Versum Materials, Inc. (NYSE:VSM) from The Vanguard Group, Inc., State Farm Mutual Automobile Insurance Company, Iridian Asset Management LLC, Robeco Boston Partners, BlackRock, Inc. (NYSE:BLK) and others for $5.6 billion on February 27, 2019. MERCK signed a definitive agreement to acquire remaining 99.99% stake in Versum on April 12, 2019. Under the offer, MERCK will acquire the shares of Versum at $48 per share in cash. On April 7, 2019, MERCK submitted a revised proposal to acquire Versum at $53 per share in cash. Under the terms of agreement and plan of merger, each outstanding share of common stock of Versum will receive $53 in cash, each outstanding stock option will receive amount in cash equal difference between the offer per share and exercise price of the options, each outstanding restricted stock unit award and each outstanding performance stock unit award of Versum will convert into the right to receive a deferred cash payment of $53 per share and each deferred stock unit award will convert into the right to receive $53 per share. MERCK will finance the acquisition with cash and a committed syndicated term loan facility of $6.3 billion and has entered into a facilities agreement with Merck Financial Services GmbH, Bank of America, N.A., London Branch, BNP Paribas Fortis NV/SA and Deutsche Bank AG Filiale Luxemburg, as underwriters, Bank of America Merrill Lynch International Designated Activity Company, BNP Paribas Fortis NV/SA and Deutsche Bank AG, as mandated lead arrangers, Deutsche Bank Luxembourg S.A., as facility agent. Of the financing, $4 billion is in bridge loans and $2.3 billion in is form of term loan. On June 18, 2019, Merck placed a hybrid bond amounting to €1.5 billion ($1.71 billion). The proceeds from the bond placement will be partly used to finance the transaction. On July 2, 2019, Merck KGaA has placed bonds amounting to €2 billion ($2.25 billion) to partially fund the acquisition of Versum. On completion, Versum will operate as a wholly owned subsidiary of MERCK. Versum will be part of Merck KGaA, Darmstadt Germany's Performance Materials business, which is led by Kai Beckmann. In case of termination, Versum would be required to pay MERCK a termination fee of $235 million.

Upon closing, MERCK will maintain Versum's home in Tempe as the major hub for the combined electronic materials business in the U.S. and also retain the R&D and manufacturing footprint of Versum. There are not expected to be any staff reductions. The transaction is subject to approval by the shareholders of Versum, approval of at least a majority of the total number of shares outstanding on a fully diluted basis, the agreement and plan of merger, dated January 27, 2019, between Versum and Entegris, Inc., having been validly terminated in accordance with its terms, applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended having expired or been earlier terminated and the receipt of necessary regulatory clearances including clearance by the Committee on Foreign Investment in the United States. The transaction is subject to receipt of antitrust clearance in China. The consummation of the offer is conditioned upon validly tendered and not withdrawn on or prior to the expiration of the Offer a number of shares which, together with any shares then owned by Merck KGaA, Darmstadt, Germany and its subsidiaries, represents at least a majority of the total number of shares outstanding on a fully diluted basis. The meeting of Versum will take on June 17, 2019.

As of March 1, 2019, the Board of Directors of Versum rejected Merck KGaA's proposal. As of March 26, 2019, MERCK offered directly to Versum stockholders on the terms and conditions set forth in the Offer as an alternative to a negotiated transaction. Versum announced that it will thoroughly review the proposal to determine the best course of action for itself and its shareholders. As on March 26, 2019, the Board of Directors of Versum asked its shareholders to take no action with respect to the tender offer. As of March 29, 2019, the Board of Directors of Versum unanimously determined to reject the offer, unanimously determined that Merck's proposal could reasonably be expected to result in a superior proposal for purposes of Versum's previously announced merger agreement with Entegris. The Versum Board determined that the offer is not in the best interests of Versum or its stockholders due to multiple factors. Accordingly, the Versum Board recommends that Versum stockholders reject the offer and not tender their shares into the offer. As of April 7, 2019, Versum's Board of Directors unanimously determined that Merck's revised proposal constitutes a superior proposal, and that Versum's Board of Directors intend to terminate the Entegris merger agreement to enter into a definitive merger agreement with respect to Merck's proposal. As of April 12, 2019, the transaction has been unanimously approved by the Executive Board of MERCK and by Versum's Board of Directors. As of April 12, 2019, the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, for U.S. antitrust purposes has already expired.

As a result of signing a definitive agreement on April 12, 2019, offer automatically expired and no shares were accepted for payment or paid for pursuant to the offer. MERCK has instructed the Depositary to promptly return all shares tendered and not withdrawn to the tendering stockholders. As of June 17, 2019, Versum's shareholders approved the transaction. As of June 19, 2019, the transaction has been cleared by antitrust authorities in Germany, Austria and Serbia. As of October 1, 2019, State Administration for Market Regulation of the People's Republic of China provided unconditional antitrust clearance for the acquisition. The transaction is expected to be completed in the second half of 2019. As of October 1, 2019, Versum expects the merger to close on October 7, 2019. The acquisition is expected to be earning per share (EPS) pre-accretive in the first year after closing and to the reported EPS in the third full year after closing, for MERCK. €75 million ($84 million) in expected run-rate synergies by the third full year after closing.

Guggenheim Securities, LLC acted as financial advisor and Matthew G. Hurd, York Schnorbus and Eric M. Krautheimer of Sullivan & Cromwell LLP acted as legal advisor for MERCK. Michael Carr of Goldman Sachs & Co. LLC acted as legal advisor for MERCK. Richard Whitney and Atish Basu of Lazard Frères & Co. LLC and Citigroup Global Markets Inc. acted as fairness opinion providers and financial advisors for Versum. In connection with Lazard's services as financial advisor, Versum agreed to pay Lazard an aggregate fee for such services of $20 million, $2 million of which was paid upon the rendering of Lazard's opinion, and the remainder is contingent upon the consummation of the merger. Versum has agreed to pay Citi for its services in connection with the merger an aggregate fee of $10 million, $2 million of which became payable upon delivery of Citi's opinion, and the remainder of which is payable contingent upon the consummation of the merger. Mario A. Ponce, Jakob Rendtorff, Nicholas Marricco, Lauren Kim, Alexia Syrmos, Roxane Reardon, Andrew Blau, Caitlin Lucey, Aria Mahboubi, Bill Sheehan, Cristina Gonzalez, Leah Nudelman, Sunny Cheong, Andrew Mandelbaum, Marcy Geller, Drew Purcell, Karen Hsu Kelley, Joia Lee, Lori Lesser, Genevieve Dorment and Melanie Jolson of Simpson Thacher & Bartlett LLP acted as legal advisor to Versum Materials, Inc.

MERCK Kommanditgesellschaft auf Aktien (XTRA:MRK) completed the acquisition of 99.99% stake in Versum Materials, Inc. (NYSE:VSM) from The Vanguard Group, Inc., State Farm Mutual Automobile Insurance Company, Iridian Asset Management LLC, Robeco Boston Partners, BlackRock, Inc. (NYSE:BLK) and others on October 7, 2019. D.F. King & Co., Inc. acted as information agent to MERCK. Computershare Trust Company, NA acted as the depository to MERCK as part of the transaction. Innisfree M&A Incorporated served as information to Versum. Versum will pay Innisfree a fee of approximately $0.75 million, plus reimbursement for certain out-of-pocket fees and expenses for its services with respect to this transaction. John A. Marzulli, Jr. of Shearman & Sterling LLP acted as a legal advisor to Citigroup.