Lonza to acquire five US manufacturing sites from Merck KGaA

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Lonza to Acquire Five Merck CDMO Sites, Doubles US Manufacturing Footprint

Lonza will acquire five Merck CDMO facilities across the US, strengthening its bioconjugate, viral vector and advanced drug manufacturing capabilities.

Lonza has signed a definitive agreement to acquire five contract development and manufacturing organization (CDMO) facilities in the United States from Merck KGaA, Darmstadt, Germany, in a deal valued in the low- to mid-triple-digit millions of Swiss francs. The transaction will significantly expand Lonza’s US manufacturing presence and strengthen its position in the rapidly growing biopharmaceutical manufacturing market.

The acquisition will increase Lonza’s US CDMO manufacturing network from four facilities to nine, adding approximately 1,100 highly skilled employees to its global workforce. Following the transaction, Lonza’s US employee base is expected to exceed 6,000. The acquired facilities will provide capabilities spanning clinical development through commercial-scale manufacturing, supporting pharmaceutical customers across several high-growth technology segments.

The five facilities bring complementary manufacturing and development capabilities. The St. Louis, Missouri, site specializes in bioconjugates, while the Madison and Verona facilities in Wisconsin manufacture high-potency payload-linkers. The Carlsbad, California, facility provides end-to-end viral vector solutions, including aseptic fill-finish capabilities. Meanwhile, the Indianapolis, Indiana, site supports lipid nanoparticles, liposomes and PEGylated protein solutions, also incorporating aseptic fill-finish operations.

These capabilities position Lonza to strengthen its exposure to antibody-drug conjugates (ADCs), other bioconjugates, viral vectors for cell and gene therapies, and advanced drug-delivery technologies. The acquisition also complements the company’s ongoing CDMO readiness investment in Vacaville, California, and its recently announced commercial spray-drying facility investment in Bend, Oregon.

Lonza CEO Wolfgang Wienand said the acquisition aligns with the company’s One Lonza Strategy and its disciplined capital allocation approach. He highlighted increasing demand for bioconjugates and viral vectors, noting that the additional facilities will strengthen the company’s ability to support customers from early-stage innovation through commercial product launches.

For Merck KGaA, the divestment represents another step in its strategy to concentrate its Life Science portfolio and direct investments towards strengthening scientific leadership and customer partnerships. Group CEO Kai Beckmann expressed confidence that Lonza would build on the operational foundation established by Merck’s CDMO teams.

The acquired operations are expected to generate approximately CHF 250 million in sales in full-year 2028, with a CORE EBITDA margin below Lonza’s existing group margin. Although the initial contribution to group performance is expected to be insignificant, Lonza anticipates considerable profitable growth following integration. The company expects the acquired business to reach peak sales at its future group margin level by the mid-2030s.

The transaction will be financed through available cash and existing credit facilities, with Lonza maintaining its BBB+ credit rating. Completion is expected by mid-2027, subject to customary closing conditions. Until closing, both companies will continue operating the businesses independently.

Following completion, Lonza will prioritize customer continuity, employee support and integration of the five facilities into its global manufacturing network. The acquisition will not affect its previously announced share buyback following the divestment of its Capsules & Health Ingredients business.

Product Impact and Chemical Commodity Price Impact

The acquisition will strengthen the availability of specialized CDMO services for antibody-drug conjugates, viral vectors, lipid nanoparticles and advanced biopharmaceutical formulations. Increased manufacturing capacity could improve pharmaceutical supply-chain resilience, reduce production bottlenecks and support the commercialization of complex therapies. Demand for high-purity solvents, specialty chemicals, pharmaceutical-grade excipients, lipids, PEG-based materials and bioconjugation reagents may increase as the acquired facilities expand operations. However, the transaction is unlikely to create an immediate price movement across bulk chemical commodities such as methanol, benzene, ethylene or propylene. Any upward pressure on specialty input prices will depend on actual production expansion, procurement volumes and supplier availability.

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Lonza to acquire five US manufacturing sites from Merck KGaA

Lonza has entered a definitive agreement to purchase five US contract development and manufacturing organisation (CDMO) sites from Merck KGaA, Darmstadt, Germany.

The acquisition involves a total enterprise valuation in the low- to mid-triple-digit millions of Swiss francs.

It would expand Lonza’s US manufacturing presence from four to nine sites and bring 1,100 employees into its global workforce, raising its headcount to more than 6,000.

Closing is expected around mid-2027, subject to customary conditions.

The five facilities cover a range of pharmaceutical technologies. The St Louis-based site focuses on bioconjugates, while two locations in Madison and Verona, Wisconsin, produce high-potency payload-linkers.

A facility in Carlsbad, California, provides end-to-end viral vector solutions, comprising aseptic fill-finish capabilities. The site at Indianapolis, Indiana, handles lipid nanoparticle, liposome, and PEGylated protein solutions, also with aseptic fill-finish capacity.

Lonza CEO Wolfgang Wienand said: “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.

“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.”

Lonza said the acquired network supports customers from clinical-stage through to commercial manufacturing in areas including antibody-drug conjugates, other bioconjugates, viral vectors for cell and gene therapies, and latest drug-delivery technologies.

For full-year 2028, the sites are expected to contribute around SFr250m ($304m) in sales at a core earnings before interest, taxes, depreciation and amortisation (EBITDA) margin below Lonza’s group level.

Lonza will pay the consideration in cash, funded through cash at hand and existing credit facilities.

The acquisition follows other recent US investments by Lonza, including ongoing work to prepare its Vacaville site for CDMO operations and a recently announced commercial spray-drying facility in Bend, Oregon.

Until the deal concludes, the businesses will continue to run independently. Both parties said they would work together to support a smooth transition.

In April 2025, Ethris partnered with Lonza for the development of room-temperature stable mRNA vaccine candidates targeting respiratory conditions.

“Lonza to acquire five US manufacturing sites from Merck KGaA” was originally created and published by Pharmaceutical Technology, a GlobalData owned brand.

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