Merger to create world's largest provider of healthcare market data

AMSTERDAM - VNU, the Dutch owner of market researcher ACNielsen, has agreed to buy data provider IMS Health for US$7 billion ($10.36 billion) in cash and stock, to become the world's biggest provider of healthcare market data.

VNU will pay US$11.25 a share in cash to IMS shareholders and 0.60415 shares of VNU stock, the Haarlem, Netherlands-based company said in a press release distributed by Euronext Amsterdam.

That is 16 per cent more than the average price of IMS shares in the past 30 days, the company said.

"This merger ... gives us the scale and capabilities to meet growing client demand for the must-have market intelligence that drives critical business decisions," said VNU chief executive Rob van den Bergh, who will head the combined company.

VNU will buy back as much as 500 million ($888 million) worth of shares.

The purchase will lead to annual savings on earnings before interest, taxes, depreciation and amortisation of 110 million by 2008.

VNU will have to spend 150 million - most of it next year and in 2007 - to achieve those savings.

IMS, based in Fairfield, Connecticut, said in January that it would cut jobs in production and development after earnings fell to US$285.4 million last year from US$639 million.

- BLOOMBERG