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* Thermo Fisher to pay $76 per share, a 12 percent premium
* Thermo Fisher to assume Life Tech's net debt of $2.2billion
* Life Tech shares up 7.5 percent; Thermo Fisher up 1.1percent
By Bill Berkrot and Susan Kelly
April 15 (Reuters) - Thermo Fisher Scientific Inc onMonday agreed to buy Life Technologies Corp for $13.6billion in a deal that would make it one of the top companies inthe hot field of genetic testing.
The pact values Life Tech at $76 per share, a 12 percentpremium, and is one of the year's biggest corporate takeovers.
The deal would catapult Thermo, the world's largest maker ofscientific and laboratory equipment, to the forefront of thefledgling field of personalized medicine, in which research isuncovering the hereditary underpinnings of diseases to bettertailor treatments to patients.
"Genetic sequencing is an area that will become increasinglyimportant over the years in terms of specialty diagnostics, andThermo needs to compete in that market because they have anumber of products in that area that ultimately could getdisplaced by sequencing applications," said Macquarie Capitalanalyst Jonathan Groberg.
Thermo Chief Executive Marc Casper said advanced genetictesting was an important field going forward, and his companywanted to get into it as an industry leader.
"We didn't want to be a more distant participant, and thistransaction facilitated us having a stronger position there.Today there are two industry leaders, Life Technologies beingone of them," Casper said in a telephone interview.
On a call with analysts, Casper acknowledged that Life Techis No. 2 behind Illumina Inc on next-generation genesequencing, but he said Life Tech has been gaining market shareand has a promising pipeline of products in development.
Illumina last year turned down a $6.8 billion hostiletakeover offer from Swiss drugmaker Roche Holding AG that demonstrated the appeal of gene-sequencing technology.
SHARES OF BOTH COMPANIES RISE
While the agreed price for Life Tech was at the high end ofanalysts' expectations, and large acquisitions typically drivedown the share price of the acquirer, Thermo said the deal wouldadd 90 cents to $1 to its per-share profit in the first fullyear, sending its shares higher. After jumping nearly 6 percent,the shares were up 1.1 percent at $80.45 in afternoon trade onthe New York Stock Exchange.
The offer represents a premium of about 12 percent to LifeTech's market close on Friday.. Life Tech shareswere up 7.5 percent at $73.11, below the offer price.
The combined company would have 2013 revenue of about $17billion, according to analysts' estimates. The acquisition willalso enhance Thermo's offerings in the fast growing field offood safety, and its ability to grow in China and other emergingmarkets.
"The combined company has significant scale in emergingmarkets and scale makes a huge difference there," said Casper,adding that the combination of the two companies "will put us ineven better position to grow in the fastest growing regions inthe world."
The acquisition is by far the biggest deal for Thermo sincethe company was created in the $12.8 billion merger of ThermoElectron and Fisher Scientific International in 2006. It is alsofar larger than the biggest previous deal on Casper's watch -the $3.5 billion acquisition of Phadia in 2011.
"We obviously had a good track record and a strongmethodology to successfully integrate businesses," Casper said."We feel comfortable in our ability to execute thissuccessfully."
Thermo expects the transaction to close early in 2014,pending U.S. regulatory and shareholder approvals.
Thermo will assume Life Tech's net debt of about $2.2billion. In the third year following the deal's closing, Thermosaid it expects to achieve cost savings of $250 million byconsolidating facilities and support functions.
Thermo's products range from basic scientific instruments,such as test tubes, to advanced mass spectrometry equipment usedto determine the chemical structure of molecules. It also sellschemicals, agents and antibodies used in the manufacture andresearch of biotech medicine - a line that will be complementedby Life Tech's product lines - and in recent years has increasedits portfolio of products for testing air and water quality andfood safety.
LIFE TECH EXPLORED MANY OPTIONS
Life Tech explored a sale after previous attempts by ChiefExecutive Gregory Lucier to boost the value of the company'sstock and capture more market share from Illumina.
Lucier said the company explored many options during alengthy strategic review, with the ultimate sale of the companyalways one of them. "We are very satisfied both with the processand the outcome," he said in a telephone interview.
Life Tech President and Chief Operating Officer MarkStevenson is expected to play a significant role in the combinedcompany, the companies said.
Lucier oversaw the merger of his former company Invitrogenand Applied Biosystems that created Life Tech.
"It's been an honor to work with a team of people thatcreated a company that ultimately Thermo Fisher thought highlyenough to pay over $13 billion for," Lucier said.
Thermo has obtained committed bridge financing from JPMorgan and Barclays, which also acted as the company'sfinancial advisers.
Sources familiar with the deal told Reuters that Life Techchose Thermo over Sigma-Aldrich Corp, a maker ofchemicals for research laboratories, and a private equityconsortium consisting of Blackstone Group, Carlyle Group, KKR & Co and Temasek Holdings.
Deutsche Bank Securities and Moelis & Co advisedLife Tech.
Wachtell, Lipton, Rosen and Katz and WilmerHale are legalcounsel to Thermo Fisher; Cravath, Swaine and Moore is legalcounsel to Life Tech.
