Lonza to Acquire Five U.S. CDMO Sites From Merck KGaA

Lonza has agreed to acquire five U.S. manufacturing sites from Merck KGaA, Darmstadt, Germany, a deal that would expand the Swiss contract development and manufacturing organization (CDMO) from four U.S. sites to nine and add about 1,100 employees.¹ Lonza valued the transaction in the low- to mid-triple-digit millions of Swiss francs, with closing expected in mid-2027.¹

For Merck KGaA, the sale fits a plan to narrow its life science portfolio. Kai Beckmann, Chairman of the Executive Board and Group CEO, said: “Today’s announcement is another important step in advancing our mid- to long-term strategic agenda. A more concentrated Life Science portfolio will allow us to focus our investments on building our scientific leadership and make us an even stronger partner for our customers.

“Our CDMO teams have built a strong foundation through their expertise and commitment. We believe Lonza is well positioned to build on that foundation and support the business’s next phase of growth.”¹

What is Lonza acquiring, and on what terms?

The sites cover bioconjugates in St. Louis; high-potency payload-linkers in Madison and Verona, Wisconsin; viral vector manufacturing and aseptic fill-finish in Carlsbad, California; and lipid nanoparticle, liposome and PEGylated protein work, also with aseptic fill-finish, in Indianapolis.¹ Lonza will pay in cash, using funds on hand and existing credit facilities, and says the transaction maintains its BBB+ credit rating.¹

Until closing, the businesses will operate independently.¹ Lonza CEO Wolfgang Wienand told investors the price would be near the midpoint of a range of 100 million to 600 million Swiss francs.²

The company expects the sites to contribute about 250 million Swiss francs in sales in 2028 at a margin below its own, with peak sales at the group’s future margin level not anticipated until the mid-2030s.¹

Why is Lonza expanding its U.S. network now?

Wienand tied the purchase to the company’s strategy: “This acquisition is a strong fit with our One Lonza Strategy and reflects our disciplined approach to capital allocation, investing in opportunities that will drive long-term, profitable growth and deliver attractive returns. It will significantly expand our US presence, bringing us even closer to our customers, while increasing the resilience of our global manufacturing network.

“With high demand for bioconjugates and viral vectors, the acquired sites will strengthen our ability to support customers from innovation to launch and commercial supply. I am particularly excited to welcome the highly experienced teams at these sites to One Lonza. It takes great people with deep scientific expertise and excellence in development and manufacturing to reliably translate breakthrough innovation into viable therapies for patients. Together, we will build an even stronger offering for our customers.”¹

The release describes the United States as the largest market for innovative pharmaceuticals.¹ Chief Financial Officer Philippe Deecke said the deal adds clinical manufacturing capabilities Lonza previously lacked there.² The sites follow Lonza’s 2024 purchase of a Roche biologics plant in Vacaville, California,² and a recently announced investment in a commercial spray-drying facility in Bend, Oregon.¹

In March, Lonza agreed to sell its Capsules & Health Ingredients business to Lone Star Funds at an enterprise value of 2.3 billion Swiss francs, a step it described as completing its shift to a pure-play CDMO, and said upfront proceeds would go toward organic growth and bolt-on acquisitions.³ The latest release says the acquisition does not change a planned share buyback, which follows closing of that sale, expected by year-end.¹

How did Merck KGaA build this network?

Merck KGaA consolidated its CDMO and contract testing units into a single Life Science Services organization in 2022, covering monoclonal antibodies, high-potency active pharmaceutical ingredients, antibody-drug conjugates, and viral and gene therapies.⁴ It had also agreed to buy the CDMO Exelead for $780 million.⁴

The materials reviewed do not specify which of the five sites trace to those earlier purchases, and Beckmann’s statement frames the sale as portfolio concentration without detailing what Merck KGaA retains in contract manufacturing.

How are analysts reading the transaction?

In early assessments, Barclays described the deal as strategically positive for Lonza, citing potential gains from higher utilization and improved margins, while JPMorgan analysts called the sale a minor positive for Merck KGaA as it concentrates on life sciences.² Because the acquired sites carry a lower initial margin, returns appear to depend on filling existing capacity, which Lonza says is available alongside additional expansion space.¹

Lonza confirmed its 2026 financial outlook and said the contribution would have an insignificant impact on the group.¹

What questions remain?

Closing is subject to customary conditions.¹ Lonza disclosed the price only as a range and did not release customer contracts or current site utilization.

After closing, its stated priorities are continuity for customers, support for employees through the transition, and integration into its global network.¹

Sources

1. Lonza signs agreement to acquire US CDMO network from Merck KGaA, Darmstadt, Germany, and significantly expands its US presence. News release. Lonza. November 3, 2026. Accessed November 3, 2026. https://www.lonza.com/news/2026-11-03-07-00

2. Satija B, Kaesebier M. Lonza buys 5 sites from Germany’s Merck to more than double US footprint. Reuters. November 3, 2026. Accessed November 3, 2026. https://live.euronext.com/en/financial-news/lonza-buys-5-sites-germanys-merck-more-double-us-footprint

3. Lonza completes its transformation to a pure-play CDMO with agreement to divest Capsules & Health Ingredients. News release. Lonza. March 6, 2026. Accessed November 3, 2026. https://www.lonza.com/news/2026-03-06-18-05

4. Merck KGaA forms new life sciences unit in push to strengthen its CDMO position. FiercePharma. February 2022. Accessed November 3, 2026. https://www.fiercepharma.com/manufacturing/merck-kgaa-forms-new-life-sciences-unit-push-to-strengthen-its-cdmo-position