Diagnostics Firms Qiagen, BioMerieux Said to Explore Tie-Up

(Bloomberg) -- Molecular testing firm Qiagen NV and French rival BioMerieux are exploring a potential combination that would unite two of Europe’s biggest medical diagnostics providers, people with knowledge of the matter said. 

The two companies have been studying the merits of a merger, said the people, who asked not to be identified because the discussions are private. 

Shares of Qiagen, which has a market capitalization of about 11.2 billion euros ($13 billion), jumped as much as 4.8% in Frankfurt trading Wednesday to hit the highest level in more than two decades. BioMerieux shares rose as much as 6.1%, the biggest intraday gain in two months. They were up 1.3% at 1:08 p.m. in Paris, valuing the company at about 13.3 billion euros.

Qiagen’s potential move comes as it weighs options for its future after Thermo Fisher Scientific Inc. abandoned plans for a $12 billion takeover last year. Since then, the rollout of vaccination programs has led to reduced levels of testing for Covid-19. In July, Qiagen revised earnings forecasts downward, citing fewer coronavirus tests.

Deliberations are at an early stage, and there’s no certainty they will result in a transaction, according to the people. A possible stumbling block in negotiations could be how much France’s Merieux family, the biggest holder of BioMerieux, would own in a combined entity, the people said. Qiagen could also attract interest from other suitors, they said. 

The company became the subject of takeover interest in February, when U.S. diagnostics firm and fellow coronavirus testmaker Quidel Corp. explored a combination, Bloomberg News reported. A deal did not materialize.

Last month, the Betaville blog reported rumors about renewed interest in a deal for Qiagen involving an unknown company. A representative for Qiagen declined to comment, while a spokesperson for BioMerieux couldn’t immediately comment.

Qiagen is led by Chief Executive Officer Thierry Bernard, a former BioMerieux executive. It sells products for food and forensic testing and has also been manufacturer of Covid-19 tests, tapping a lucrative market for diagnostics companies.

Paris-listed BioMerieux specializes in so-called in vitro diagnostics, tests performed on blood and tissue. The company has a presence in 44 countries and posted revenue of 3.1 billion euros in 2020, more than 90% of which was generated outside France, according to its website.

Health-care companies have been a key driver of the ongoing boom in global mergers and acquisitions. Transactions valued at $486 billion have been announced in the sector this year, a 77% increase on the same period in 2020, according to data compiled by Bloomberg. These include one of the year’s biggest deals, the more than $30 billion leveraged buyout of Medline Industries Inc. 

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