Thermo Fisher’s failed Qiagen acquisition will not significantly affect its future growth

Following the collapse of Thermo Fisher Scientific’s $11.5bn takeover of Qiagen;

Brian Hicks, Medical Devices Analyst at GlobalData, a leading data and analytics company, offers his view:

“As one of the largest acquisitions in the MedTech industry to have potentially occurred in 2020, a successful deal would have propelled Thermo Fisher’s market capitalization by nearly 7%, thereby exceeding $175bn. The lapse of offer will likely not affect the future growth of the laboratory equipment giant in a significant matter, as its two end markets, pharmaceutical/biotech and diagnostics/healthcare, led the net growth of its revenue by 10% in Q2 2020. Furthermore, Thermo Fisher’s diverse portfolio of products and services will enable it to continue remaining as the market leader of MedTech by a wide margin.

“The failed acquisition marks the level of confidence held by Qiagen shareholders in their company’s continued growth and return on investment. This is despite Thermo Fisher having previously increased its original share price offer of €39.00 to €43.00 and reducing the minimum acceptance threshold of tendered shares from 75% to 66.7%.

“The majority of Qiagen shareholders (53%) not tendering their shares comes as little surprise however, given that for Q2 2020, Qiagen reported net sales increasing by an impressive 19% (at constant exchange rate) since Q2 2019. Unlike most companies that are struggling due to the COVID-19 pandemic, Qiagen has remarkably benefited thanks to a surge in demand for its coronavirus testing equipment, consumables and related services.

“As the pandemic continues to spread globally, Qiagen’s coronavirus testing equipment will see even further demand for the foreseeable future. However, investors will need to consider the financial performance of a post-pandemic era, where sales will most likely decline in both its instruments and consumables business segments due to reduced demands. By that point, any acquisition offers Qiagen may receive could come at a lower value.”

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