Agilent to Acquire Varian for $1.5 Billion

(Palo Alto, CA, USA) should establish Agilent, Inc.'s (Santa Clara, CA, USA) position as a leading provider of analytic instrumentation to the applied and life sciences markets.

Agilent Technologies and Varian have signed a definitive agreement for the acquisition by Agilent of Varian, a leading worldwide supplier of scientific instrumentation and associated consumables for life science and applied market applications. Agilent will pay US$52 cash per share of common stock for Varian in a transaction that represents a premium of approximately 35% to Varian's closing price on July 24, 2009.

Varian had annual revenues of $1 billion in fiscal year 2008. This transaction expands Agilent product and application breadth in industrial and life sciences markets and establishes entry into nuclear magnetic resonance (NMR), imaging, and vacuum technology markets. The acquisition price reflects a premium of approximately 35% to Varian shareholders.

"This acquisition is a major step in Agilent's transformation into a leading bioanalytical measurement company,” said Bill Sullivan, Agilent's president and chief executive officer. "While we continue to be a world leader in electronic measurement, our biggest opportunities for future growth are in bioanalytical measurement. For more than 60 years, Varian has built rich talent, technology, products, and relationships in this area. The combination of Varian with Agilent's bioanalytical measurement business will result in the broadest product offering in the industry. The acquisition will establish Agilent as a clear market leader in analytic solutions and give us the talent and technology base for creating unique new products and markets.”

"After thorough review together with our independent advisors, our board of directors determined that this transaction delivers excellent value for our shareholders,” said Garry Rogerson, chairman and chief executive officer of Varian, Inc. "We also anticipate that the combination will yield strong benefits for our customers and employees. Like Agilent, Varian has a long history as a technology leader. We each bring expertise and experience across a different but complementary set of markets and applications. For instance, while Agilent is a leader in food safety, Varian is well established in the energy industry, and has a broad spectrum of products for environmental analysis. Together, the combined company will be able to provide customers with the most comprehensive set of solutions across a wider range of industries.”

Once the acquisition has been completed, Adrian Dillon, Agilent's executive vice president and chief financial officer, will assume responsibility for combining Varian with Agilent's bioanalytic measurement segment consistent with Agilent's operating model. "We have the opportunity to create significant value for Agilent shareholders by leveraging the combined entity's infrastructure and global supply chain,” said Dillon.

The transaction is expected to generate $75 million in yearly cost synergies and achieve Agilent's 20% return on invested capital (ROIC) target within four to five years. The transaction is subject to approval by the shareholders of Varian and will be completed after achieving customary closing conditions and regulatory approvals, which Agilent expects before calendar year-end. The transaction is not subject to any financing conditions.

Agilent's bioanalytic measurement business provides application-focused solutions that include instruments, software, consumables and services that enable customers to identify, quantify, and analyze the physical and biologic properties of substances and products. Agilent is a global leader in gas chromatography and gas chromatography/mass spectrometry, and liquid chromatography and liquid chromatography/mass spectrometry used to analyze the composition of air, water, food, drugs, industrial process streams, and forensic evidence.

Varian is a leading worldwide supplier of scientific instruments and vacuum technologies for life science, environmental, energy, and applied research and other applications. The company provides complete solutions, including instruments, vacuum products, laboratory consumable supplies, software, training and support through its global distribution and support systems. Varian employs approximately 3,600 people worldwide and operates manufacturing facilities in North America, Europe, and Asia Pacific. Varian had fiscal year 2008 sales of $1.0 billion.

Agilent Technologies is a world-leading measurement company and a technology leader in communications, electronics, life sciences, and chemical analysis. The company's 19,000 employees serve customers in more than 110 countries. Agilent had net revenues of $5.8 billion in fiscal 2008.

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