Drug giant Merck said it will buy Cubist Pharmaceuticals for about $9.5 billion, or $102 a share in cash, bringing Merck a slate of medicines administered in the hospital setting, many for bacterial infections.
News of the deal sent Cubist's share price surging by more than 34 percent, to $101.15, in premarket trading. Merck's stock price also rose more than 5 percent.
The deal represents a 35 percent premium to Cubist's average stock price in the last five trading days, Merck said in a statement Monday. The equity value is $8.4 billion, with about $1.1 billion in debt.
Buying Lexington, Massachusetts-based Cubist brings Merck the $1 billion antibiotic Cubicin, as well as a slate of other drugs for bacterial infections and one designed to help patients recover faster from bowel surgery. Cubist is also expected to win U.S. approval for another antibiotic, Zerbaxa, this month, which RBC Capital Markets analyst Adnan Butt estimates could draw more than $1.5 billion in annual revenue.