Lonza has agreed to acquire five US contract development and manufacturing organisation (CDMO) sites from Merck KGaA, expanding its American manufacturing network and adding capabilities in antibody-drug conjugates, viral vectors and advanced drug delivery.

The acquisition will add approximately 1,100 employees and increase Lonza’s US CDMO manufacturing sites from four to nine, taking its US workforce to more than 6,000.

The transaction covers clinical and commercial development and manufacturing operations across bioconjugates, high-potency payload-linkers, viral vectors, lipid nanoparticles and liposomes.

The acquired facilities are located in St Louis, Missouri; Madison and Verona, Wisconsin; Carlsbad, California; and Indianapolis, Indiana.

Acquisition expands ADC and viral vector manufacturing

The five sites will add capabilities across several pharmaceutical manufacturing technologies.

The St Louis facility specialises in bioconjugates, including technologies used in antibody-drug conjugate (ADC) manufacturing.

The Madison and Verona facilities in Wisconsin provide high-potency payload-linker capabilities, supporting the production of components used in targeted cancer therapies such as ADCs.

In Carlsbad, California, the acquired operation provides end-to-end viral vector solutions, including aseptic fill-finish capabilities for cell and gene therapy applications.

The Indianapolis site adds lipid nanoparticle, liposome and PEGylated protein capabilities, also including aseptic fill-finish services.

The acquisition will expand Lonza’s ability to support pharmaceutical customers from clinical development through to commercial manufacturing across these technology areas.

Wolfgang Wienand, CEO of Lonza, 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.”

He added: “It will significantly expand our US presence, bringing us even closer to our customers, while increasing the resilience of our global manufacturing network.”

Merck divests five CDMO manufacturing facilities

Under the agreement, Lonza will acquire the five facilities and associated businesses at a total enterprise valuation in the low- to mid-triple-digit millions of Swiss francs.

Approximately 1,100 employees will transfer to Lonza following completion.

Kai Beckmann, chairman of the executive board and group CEO of Merck KGaA, Darmstadt, Germany, said: “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.”

He added: “We believe Lonza is well positioned to build on that foundation and support the business’s next phase of growth.”

The transaction forms part of Merck’s strategy to concentrate its Life Science portfolio and redirect investment towards other areas of the business.

Acquired sites expected to generate CHF 250m in 2028

The facilities are expected to generate approximately CHF 250m in sales in full-year 2028, with a core EBITDA margin below Lonza’s existing group level.

Lonza expects the acquired operations to achieve its future group margin level by the mid-2030s as the sites are integrated and manufacturing capacity is developed.

The company plans to use existing available capacity and additional expansion space, with further investment dependent on market demand.

Completion is expected in mid-2027, subject to customary closing conditions.

Until the transaction closes, the five businesses will continue to operate independently. Lonza and Merck will work together to support the transfer, with customer continuity and employee support among the priorities following completion.

The acquisition follows other US manufacturing investments by Lonza, including CDMO readiness work in Vacaville, California, and a commercial spray-drying facility in Bend, Oregon.

The transaction will more than double Lonza’s US CDMO site network and expand its manufacturing capabilities in areas including ADCs, cell and gene therapies and advanced drug delivery.