Lonza Buys Arch for $1.2B, Becomes Largest Microbial Controller

Swiss drug industry supplier Lonza is buying Arch Chemicals (NYSE:ARJ) for $1.2 billion, creating the worlds largest business in the microbial control market.

The deal, valued at $47.20 a share, represents a 36.7% premium to the U.S. groups average closing price over the last 30 trading days.

Subject to customary closing conditions, regulatory approvals and consent from a majority of Arch shareholders, the deal is slated to close in the latter half of 2011. Lonza expects to commence the tender offer by July 15.

This transaction represents an excellent strategic and cultural fit, Lonza CEO Stefan Borgas said in a statement on Monday. The business will enjoy a strong platform for accelerated future growth for the benefit of all our stakeholders.

Arch makes products responsible for destroying or selectively inhibiting the growth of harmful microorganisms. Borgas said the deal allows the companies to become a global leader in controlling unwanted microbes.

The global microbial control market is currently valued at about $10 billion and is growing roughly 4% to 6% a year.

Upon the deals consummation, key growth factors for the company will be within the hygiene, water treatment, materials protection and personal care segments.