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Merck Acquires Rosetta Inpharmatics for $620 Million in Stock

NEW YORK, May 11 – Merck has agreed to acquire Rosetta Inpharmatics in a stock-for-stock transaction worth $620 million, the companies said Friday.

The tax-free reorganization will swap each share of Rosetta stock for 0.2352 shares of Merck stock, giving a value of $18 per share of Rosetta stock, an 82 percent premium on Thursday’s closing price.

"In our continuous efforts to enhance our drug discovery research capabilities, we found Rosetta to be an excellent acquisition candidate because of its genomics expertise and its ability to add significant value to Merck's demonstrated scientific capabilities,"  Richard Kender, Merck's vice president of corporate development and licensing, said in a statement.

Rosetta will operate as a wholly-owned subsidiary and independent unit within Merck Research Laboratories, keeping its facilities in Kirkland and Bothell, Wash. Rosetta’s current chairman and CEO, Stephen Friend, will report to Anthony Ford-Hutchinson, executive vice president for worldwide basic research at Merck, as president of Rosetta and vice president for basic research at Merck.

"Joining Merck allows us to move into our next stage of development, which is beyond providing tools and software and into direct involvement with drug discovery," Friend said in a statement.

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