Germany's Merck to acquire Silence in cash deal with enterprise value of $1.1 billion
Key Facts
Germany's Merck has agreed to acquire all of Silence Therapeutics for cash in a deal with an enterprise value of $1.1 billion, according to the target company's announcement statement. The agreement values the equity at about $1.3 billion, a valuation Silence disclosed alongside the enterprise value in its statement on the proposed acquisition terms. The companies signed the agreement on October 18, 2026, according to the document filed with the U.S. Securities and Exchange Commission. The agreement sets cash consideration for American depositary share holders upon completion of the acquisition, with completion remaining subject to closing conditions. The buyer is Germany's Merck, which is separate from the U.S. Merck that trades under the ticker MRK on the New York Stock Exchange. The agreement comes as Silence continues developing divesiran, which met the primary endpoint in a clinical study for the treatment of polycythemia vera.
Under the announced terms, holders will receive $20.00 in cash for each American depositary share upon completion of the deal, according to Silence's SEC filing. Each ADS represents 3 ordinary shares in the company, so the stated consideration per ADS applies to that unit of the securities being acquired. Silence said the offer includes a 130% premium to the closing price of its ADSs in the last trading session before the agreement was announced. Compared with trading over a longer period, the proposed consideration exceeds the volume-weighted average price over the 30 days before the announcement by 82%. The comparison periods for the two premiums differ: the first is based on the previous session's closing price, while the second is based on a volume-weighted average. Completion of the acquisition is not subject to financing, according to the filing outlining the commitments and conditions associated with the agreement.
The agreement was signed following a competitive sale process, according to Iain Ross, Silence's interim chief executive and chairman, in the statement filed with the SEC. Ross described the agreement as the "outcome of a competitive sale process" in his comments on the process that led to the cash acquisition terms. Silence's board unanimously approved the agreement, according to the acquisition document setting out the board's position on the proposed deal. The board also resolved to recommend that shareholders approve it when it is put to them as part of the implementation process. Alongside the board's position, security holders representing about 14% of Silence's voting power signed an agreement to support the acquisition. Their commitment includes voting in favor of the deal, according to the company's statement, while shareholder approval remains a requirement for completion.
In Silence's drug development pipeline, divesiran targets polycythemia vera, a disease characterized by excessive production of red blood cells, according to the company's definition. The drug works by silencing the target gene, thereby raising hepcidin levels, according to Silence's published explanation of the development program. This reduces the iron available to bone marrow for red blood cell production, the mechanism the company describes for its investigational drug. In the SANRECO study, divesiran met the primary endpoint, according to Silence's SEC filing on the results. The clinical response rate among patients receiving the drug was 88%, compared with 19% among those receiving placebo in the same study. Silence cited these results when announcing its plan to move into a Phase 3 trial while testing a dosing schedule with longer intervals.
In the market, Silence's American depositary shares rose 125.6% in morning trading on the day the acquisition was announced, according to Investing.com. The jump came as the cash consideration for the acquisition was unveiled, following the signing of the agreement setting out the terms for the company's transfer to Germany's Merck. The observed move was in Silence's ADSs, the securities for which the agreement specified the cash consideration payable to holders upon completion. The morning trading gain reflects the change in the market price of the ADSs during the announcement day, while the offer premium compares the cash consideration with the previous closing price. The price holders receive under the agreement depends on completion of the acquisition under the conditions set out in the filing. Those conditions include shareholder and regulatory approvals and the court process required to implement the deal through a UK scheme of arrangement.
Silence expects the acquisition to close in the first quarter of 2027, subject to closing conditions, according to its statement filed with the SEC. The agreement will be implemented through a UK scheme of arrangement requiring the company's shareholders to approve the proposed deal. Regulatory approvals and sanction by the High Court of England and Wales are also required, according to the filing on the implementation process. On clinical development, Silence expected to begin the Phase 3 trial of divesiran in the first half of 2027, based on the results of the previous study. The planned trial compares dosing every 12 weeks with placebo, according to the company's disclosure on the SANRECO results and next development steps.