Lonza is expanding its U.S. contract development and manufacturing operations through an agreement to acquire five manufacturing sites from Merck KGaA, Darmstadt, Germany. The deal will increase Lonza’s U.S. CDMO footprint from four locations to nine and add capabilities in several growing areas of biopharmaceutical development and manufacturing.

The transaction carries an enterprise valuation in the low- to mid-triple-digit millions of Swiss francs. Once completed, approximately 1,100 employees at the acquired sites will join Lonza, bringing its U.S. workforce to more than 6,000. The companies expect to close the deal in mid-2027, subject to customary conditions.

The sites will extend Lonza’s development and manufacturing services from clinical-stage programs through commercial production. Their capabilities span antibody-drug conjugates (ADCs) and other bioconjugates, viral vectors for cell and gene therapies, and advanced drug-delivery technologies. The acquisition also adds aseptic fill-finish capacity and specialized services for high-potency payload-linkers, lipid nanoparticles, liposomes and PEGylated proteins.

The five locations and their primary capabilities include:

• St. Louis, Missouri: Bioconjugates;
• Madison and Verona, Wisconsin: High-potency payload-linkers;
• Carlsbad, California: End-to-end viral vector services, including aseptic fill-finish; and
• Indianapolis, Indiana: Lipid nanoparticle, liposome and PEGylated protein solutions, including aseptic fill-finish.

Lonza says the acquisition complements its existing U.S. investments, including preparations for CDMO operations in Vacaville, California, and a previously announced commercial spray-drying facility in Bend, Oregon. Together, these projects are intended to broaden the company’s domestic service offering and strengthen its ability to support pharmaceutical customers in the U.S. market.

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 group level. The initial contribution to the group is expected to be insignificant. Lonza anticipates that the businesses will benefit from integration into its CDMO-focused operating model, with growth supported by available capacity and additional expansion space. The company expects the acquired business to reach peak sales at its future group margin level by the mid-2030s.

Lonza CEO Wolfgang Wienand describes the acquisition as consistent with the company’s One Lonza strategy and its approach to capital allocation. He said the expanded network will bring Lonza closer to customers while adding capacity in areas such as bioconjugates and viral vectors. Merck KGaA Chairman of the Executive Board and Group CEO Kai Beckmann says the divestment will allow Merck to concentrate investment on its broader Life Science portfolio and scientific capabilities.

The purchase will be funded with cash on hand and Lonza’s existing credit facilities. The company said the financing structure is expected to preserve its BBB+ credit rating. The transaction will not affect Lonza’s previously announced share buyback following the divestment of its Capsules & Health Ingredients business.

Until closing, the five sites will continue to operate independently. Lonza and Merck plan to coordinate the transition, with customer continuity, employee support and integration into Lonza’s global network identified as priorities following completion. BofA Securities is serving as financial advisor to Lonza.

For more information, visit www.lonza.com.