Sullivan & Cromwell is acting for longtime client Merck in its $3.9bn acquisition of US biotech company SpringWorks Therapeutics, which is being repped by Goodwin Procter. 

The Sullivan & Cromwell team is led by corporate partners Matt Hurd (New York), Eric Krautheimer (Los Angeles) and York Schnorbus (Frankfurt), who also led the team that acted for Merck in its $6.4bn acquisition of semiconductor materials manufacturer Versum Materials in 2019. 

Meantime the Goodwin Procter team guiding SpringWorks is led by global head of M&A Stuart Cable alongside Robert Masella (co-chair, public M&A) and M&A partners Mike Patrone, Jean Lee and Amanda Gill. It also includes partner Kingsley Taft, co-chair of the firm’s life sciences group, who in 2019 led the Goodwin team that guided SpringWorks’ $186m IPO. 

The deal will bring Merck therapies for rare cancers ahead of anticipated revenue losses linked to expiring patents. The Darmstadt, Germany-based company said the deal also aligned with its aim to strengthen its healthcare business in the US, the world’s largest pharmaceutical market. 

The purchase price of $47 per share in cash represents an equity value of about $3.9bn, or an enterprise value of $3.4bn, when SpringWorks’ cash holdings are deducted. 

Reuters reported the deal’s price tag was around one-fifth lower than analysts expected due to lack of other serious bidders, as well as the wider devaluation of the US biotech sector. 

The XBI index that tracks US biotech stocks has fallen 12% this year, Reuters reported, as policy and regulatory changes including mass layoffs at the US Food and Drug Administration fuel market uncertainty and stall large life sciences deals. 

The SpringWorks deal will be funded with available cash and new debt. Merck said it expected the combination would immediately contribute to its revenues, adding it would still be able to pursue larger transactions.

The Sullivan & Cromwell team acting for Merck also includes partners Sam Hynes and Michael Rostenthal (both antitrust), Tessa Lee (tax), Mehdi Ansari (IP) and Jeannette Bander (employment and compensation). Special counsel Sarah Remmer Long also advised on securities laws and financing matters.

The deal is expected to close during the second half of 2025, subject to approval by SpringWorks’ shareholders and regulatory clearance.

JP Morgan is acting as financial adviser to Merck. Centerview Partners and Goldman Sachs are acting as joint financial advisers to SpringWorks.