Swiss drug manufacturer Lonza said Tuesday it agreed to buy five U.S. contract manufacturing sites from Germany’s Merck KGaA. The deal would more than double Lonza’s U.S. manufacturing network for contract customers, from four sites to nine, and bring about 1,100 employees into the company.

The purchase would give Lonza additional U.S. capacity to make components for targeted cancer medicines and to support cell and gene therapy programs. It covers existing operations with employees and customer programs, rather than five new factories. The companies expect to close in mid-2027, subject to approvals and other closing conditions.

Five sites, four states

The facilities span four states, and each group of sites serves a different production need. According to Lonza’s announcement, the St. Louis, Missouri, site works on bioconjugates, and the Madison and Verona sites in Wisconsin make payloads and linkers used in some of those products. In an antibody-drug conjugate, the linker joins a drug payload to an antibody that binds to a target. Putting those steps within one manufacturing network would give Lonza more of the work that goes into such products.

The Carlsbad, California, site specializes in viral vectors, which are used to deliver genetic material in some therapies. Indianapolis, Indiana, brings capabilities in lipid nanoparticles, liposomes and proteins modified with polyethylene glycol. The Carlsbad and Indianapolis sites also have sterile fill and finish capabilities, according to the company. That step puts a manufactured medicine into its final container under controlled conditions.

The mix means the nine-site count says only part of what Lonza would gain. Fierce Pharma noted that the purchase would expand several technical specialties at once. A customer seeking one of those services would still need to evaluate the specific facility and process; capacity at one location does not make the other locations interchangeable.

What the companies disclosed about the price

Merck described the consideration as a mid-triple-digit million-euro amount. Lonza characterized enterprise value in Swiss francs, using a low- to mid-triple-digit million range. The disclosures use different currencies and neither supplies an exact price. Reuters reported that Lonza put the price near the midpoint of a range from 100 million to 600 million Swiss francs.

Lonza plans to pay cash using available cash and existing credit facilities. It expects the acquired sites to generate roughly 250 million Swiss francs in 2028 sales, with a margin on its core earnings measure below that of the wider group. That figure is management’s forecast for a future full year, rather than revenue already recorded by Lonza. The company kept its existing 2026 outlook and longer-term financial ambitions, so the announcement did not raise near-term guidance.

The margin forecast also sets a different benchmark from the sales forecast. The acquired operations could meet the sales estimate and still earn less on each franc of revenue than Lonza’s existing business. Lonza expects the sites eventually to reach the group’s future margin level by the mid-2030s. That leaves a substantial gap between the expected closing and the point at which management thinks the operations could match the wider company’s profitability.

What Merck is keeping

The seller is Merck KGaA of Darmstadt, Germany. Its own announcement described the divestiture as a way to concentrate investment in the rest of its Life Science business. The agreement excludes BioReliance Contract Testing Services. Merck says it will continue supplying consumables, technology and services to drugmakers and contract manufacturers, including Lonza, after the transaction closes.

The companies say the businesses will operate independently until closing. Lonza expects its U.S. headcount to exceed 6,000 once the employees transfer. The roughly 1,100 figure refers to staff expected to join from the acquired operations; it does not represent a plan to create 1,100 new jobs. Both companies identified continuity for customers and employees as a priority during the transition.

Buying operations alongside new construction

Lonza is also investing in existing U.S. operations. It used its October investor update in Vacaville, California, to outline its strategy as a dedicated contract manufacturer. In September it separately announced a commercial spray-drying facility in Bend, Oregon, that it expects to complete in 2029. That facility is a construction project. Tuesday’s agreement, by contrast, would transfer operating sites and the people already doing the work.

The difference matters for how the expansion will show up. The acquisition would immediately change who owns the sites at closing, but it would not by itself add five factories to the country’s manufacturing base. Lonza says there is room to expand the acquired operations over time as customer demand warrants. The companies did not announce an expansion budget for each location.

The next concrete milestone is closing, which still depends on regulatory approvals and other conditions. After that, the practical questions are whether customer programs continue without interruption, how much of the available manufacturing capacity customers use, and whether the sites deliver the sales it projects for 2028.