Lonza to double its US manufacturing network with Merck deal

Lonza is adding five US manufacturing plants to a network that will nearly double in size. The Swiss life sciences group announced on Tuesday, November 3, that it will acquire the sites from Germany’s Merck Group. The deal lifts Lonza’s US contract development and manufacturing organisation, or CDMO, network from four facilities to nine.

CDMOs develop and manufacture medicines on behalf of pharmaceutical companies. Lonza says the acquired network can support customers from the clinical phase through to commercial launch, in growth areas for the industry. The company identifies the United States as the largest market for innovative pharmaceutical products.

For Lonza, the transaction brings a larger operating footprint in that market and adds sites serving customers at different stages of drug development. The acquisition is scheduled to close in mid-2027, subject to customary conditions.

The five facilities span the Midwest and both coasts. They are located in St Louis, Missouri; Madison and Verona, Wisconsin; Indianapolis, Indiana; and Carlsbad, California. Together, the sites extend Lonza’s US presence across several established manufacturing locations.

The additions take the company’s US CDMO count to nine, from four before the deal. The acquired operations are part of Merck Group, the German company selling the plants to Lonza. Their existing work supports pharmaceutical customers from clinical development through commercial launch, according to Lonza’s announcement.

That range matters to the structure of the business: CDMO services cover both development and manufacturing, rather than the production of medicines alone. The acquisition therefore adds sites serving customers along that process. Lonza is paying in cash, using existing funds and credit facilities. Completion remains conditional on customary requirements and is planned for mid-2027.

Around 1,100 employees are expected to move to Lonza with the facilities. Their transfer would bring the Swiss group’s US workforce to more than 6,000, according to the announcement. The transaction thus adds both operating capacity and a sizeable workforce to Lonza’s American business.

The five sites are in St Louis, Madison, Verona, Indianapolis and Carlsbad. Two are in Wisconsin, while the other three are in Missouri, Indiana and California. The acquired network serves pharmaceutical customers from clinical-stage work through to commercial launch.

For employees, the expected transfer is tied to the change in ownership of those operations. Lonza has said the deal will be financed with cash from existing funds and credit facilities. The companies expect to complete it in mid-2027, subject to customary conditions precedent. The employee and site totals are part of the transaction announced on Tuesday, November 3.

The acquired businesses are expected to add around CHF 250 million in revenue in 2028. Lonza said their core EBITDA margin will initially sit below the group’s level, but expects it to change over time. The company reaffirmed its 2026 outlook and medium-term financial targets alongside the acquisition announcement.

The purchase price is based on a company valuation in the low to mid three-digit millions of Swiss francs. Lonza will fund the transaction in cash through existing funds and credit facilities. The expected mid-2027 closing depends on customary conditions precedent.

The announced share buyback following Lonza’s sale of its capsules and health ingredients business remains unaffected by the transaction, the company said. For the Swiss group, the deal expands its US CDMO network from four sites to nine and is expected to bring its American workforce above 6,000. The revenue contribution is forecast for the 2028 financial year.