Merck Ends $30B Acquisition Talks, Institutional Investor Cuts Stake by 7%
Merck & Co. ended acquisition discussions with Revolution Medicines after failing to agree on a buyout price for a potential $30 billion deal, though talks could resume. Cullen Frost Bankers sold 17,082 Merck shares, cutting its stake by 7% to 225,581 shares valued at $18.93 million.
1. Merck Withdraws from Revolution Medicines Acquisition Talks
Over the weekend, Merck & Co. confirmed that it has paused discussions to acquire Revolution Medicines after the two sides failed to agree on valuation. Insiders had indicated that the deal could have valued the oncology-focused biotech at approximately $30 billion. While sources suggest talks could resume, today’s announcement underscores Merck’s disciplined approach to deal size and its focus on high-potential oncology assets within its broader R&D strategy.
2. Major Investors Adjust Positions in Merck Shares
Recent SEC filings reveal that Cullen/Frost Bankers Inc. reduced its stake in Merck by 7.0%, selling 17,082 shares and now holding 225,581 shares. In contrast, Charles Schwab Investment Management increased its holding by 9.4%, adding 4.6 million shares and boosting its total to 53.9 million shares. New entrants include DLD Asset Management and Norges Bank, each deploying roughly $2.9 billion into Merck during the second quarter. Franklin Resources expanded its position by 23.5%, acquiring 5.1 million additional shares, while Fisher Asset Management raised its stake by 2.3%. Institutional ownership now stands at just over three-quarters of outstanding stock.
3. Q4 Earnings and Dividend Update
In its most recent quarterly report, Merck posted earnings per share of $1.94, falling $0.14 short of consensus projections. The company delivered a return on equity of 44.5% and maintained a net margin of 29.6%. Merck declared a quarterly dividend of $0.85 per share, translating to an annualized payout of $3.40 and a yield of 3.1%, up from the prior quarter’s $0.81. Management emphasized that free cash flow remains strong, supporting continued investment in oncology and vaccine pipelines.
4. Insider Transactions and Analyst Outlook
Executive Vice President David Michael Williams sold 8,614 shares at an average price of $83.59, trimming his holdings by 25.9%. On the sell-side, eight analysts currently rate Merck as a Buy, seven as Hold and two as Sell. Consensus price targets have been raised in recent weeks, with the average target now at $114.20, reflecting optimism around the performance of Keytruda, Gardasil and late-stage clinical programs in oncology and infectious disease.