Darmstadt, Germany, December 8, 2014 – Merck KGaA, Darmstadt, Germany, a leading company for innovative and top-quality high-tech products in the pharmaceutical, chemical and life science sectors, today successfully issued a hybrid bond with a two-tranche structure amounting to € 1.5 bn. The issuance is part of the financing of the proposed acquisition of U.S.-based life science company Sigma-Aldrich, which was announced in September 2014.

Both tranches have a maturity of 60 years. The first tranche of € 1.0 billion pays a coupon of 2,625% and contains an early redemption option for Merck KGaA, Darmstadt, Germany after 6.5 years. The second tranche, amounting to € 500 million and carrying coupon of 3,375%, includes an early redemption right after 10 years. The issuance supports Merck KGaA, Darmstadt, Germany’s credit rating by receiving an equity credit treatment from both rating agencies Standard & Poor’s and Moody’s. The bond is subordinated to all of Merck KGaA, Darmstadt, Germany’s other existent financial liabilities.

“For the proposed Sigma-Aldrich acquisition, this hybrid transaction is a very important part of our financing structure. It is a clear signal to the capital markets that Merck KGaA, Darmstadt, Germany is committed to a conservative financial policy,” said Marcus Kuhnert, Group Chief Financial Officer. The acquisition is a key element in Merck KGaA, Darmstadt, Germany’s “Fit for 2018” transformation and growth program aimed at strengthening the company’s three growth platforms, healthcare, life science and performance materials.

The transaction was significantly oversubscribed and generated strong international demand, with the majority being placed in Germany, France and the UK. The bond achieved a well-diversified distribution among a wide range of institutional investors such as fund managers, insurance companies and banks. Bookrunners of the transaction were Merck KGaA, Darmstadt, Germany’s relationship banks.

Merck KGaA, Darmstadt, Germany is rated A flat (negative outlook) by Standard & Poor’s and A3 (under review for downgrade) by Moody’s.