Jones Lang LaSalle


Possible Deal Would Make Major Player in Lab Tools
By ANDREW ROSS SORKIN and ANDREW POLLACK

Fisher Scientific International, a supplier of medical laboratory equipment, was near a deal last night to merge with Thermo Electron Corporation, a rival, in a deal valued at about $11 billion, people involved in the transaction said.

The deal would create a new giant in the laboratory instrument business, an industry that has already been marked by some degree of consolidation. Both Thermo Electron and Fisher have been active in buying smaller scientific instrument and chemical companies.

The boards of both companies were planning to meet last night to approve the transaction, these people said. An announcement of the deal is expected today, though people involved in the talks warned that the talks could collapse.

The transaction is unusual in that Thermo Electron, which has only about half the revenues of Fisher, is technically the acquirer in the deal, these people said. Thermo Electron would be using its cash and shares to buy Fisher. Fisher had sales last year of $5.6 billion, while Thermo's sales were $2.6 billion.

Thermo Electron's chief executive, Marijn E. Dekkers, would run the combined company, these people said, though in some ways the deal was being structured as a merger of equals, with both companies getting equal representation on the combined company's board.

Spokesmen for the two companies did not return calls yesterday afternoon.

Fisher, based in Hampton, N.H., says it provides more than 600,000 products and services for use by pharmaceutical and other laboratories. These include biochemicals, nutrients for growing cells, glassware and sterile liquid-handling systems. It has about 19,000 employees and was founded in 1902.

Thermo Electron, based in Waltham, Mass., bills itself as the world leader in analytical instruments in the world. While some of its product line overlaps with that of Fisher, it also concentrates more on some sophisticated measuring instruments, such as mass spectrometers, which are used to study proteins and chemicals. It was founded in 1956 and has more than 11,000 employees.

Both companies have been growing and diversifying through acquisitions. Fisher, for instance, recently completed the acquisition of Athena Diagnostics, which provides genetic testing services, for $283 million. It also spent $125 million to buy Clintrak Pharmaceutical Services, which provides supply management for clinical trials

In 2005, Thermo Electron spent close to $1 billion on acquisitions, including $833.5 million in cash, its largest acquisition ever, for Kendro Laboratory Products, which is a supplier of centrifuges, incubators and other equipment.

Thermo Electron has gone through major restructurings. Starting in the 1980's, it spun out numerous businesses into separate public subsidiaries, in which it kept a majority stake.

But in 2000, it began to take all those companies private, selling businesses it no longer considered strategic and trying to unify dozens of brands under the single name Thermo Electron. Mr. Dekkers, who joined the company as chief operating officer in 2000 and became chief executive in 2002, has presided over much of this revamping.

David Carr, whose column normally appears on this page, is on vacation until next week.