Announcement • May 05

Merck Sharp & Dohme LLC completed the acquisition of Terns Pharmaceuticals, Inc. (NasdaqGS:TERN).

Merck Sharp & Dohme LLC signed a definitive agreement to acquire Terns Pharmaceuticals, Inc. (NasdaqGS:TERN) for $6.2 billion on March 24, 2026. Under the terms of the transaction, Merck will acquire Terns for $53.00 per share in cash. In the event of termination of the transaction under certain circumstances, Terns Pharmaceuticals will be required to pay a termination fee of $235 million and Merck Sharp & Dohme will be required to pay a reverse termination fee of $270 million. The transaction is expected to finance primarily through new debt issuance. The transaction has been approved by both Merck’s and Terns’ Boards of Directors. The acquisition is subject to a majority of Terns’ stockholders tendering their shares in a tender offer that will be initiated by Merck, expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, approval of offer by target shareholder, regulatory approvals and other customary conditions. The Offer is expected to close by 11:59 p.m. Eastern Time on May 4, 2026, provided all required conditions are met or waived by Merck by that date. On April 7, 2026, Merck & Co Inc announced the commencement of the tender offer with period runs through May 4, 2026. The transaction is subject to close in the second quarter of 2026. As of April 23, 2026, Expiration of Hart-Scott-Rodino Act Waiting Period expired at 11:59 p.m., Eastern Time. Centerview Partners LLC and Jefferies LLC acted as financial advisors and fairness opinion providers for Terns Pharmaceuticals, Inc. Damien Zoubek, Jenny Hochenberg, Zizi Petkova and Jeff Jay of Freshfields US LLP acted as legal advisors for Terns Pharmaceuticals, Inc. Catherine Dargan, Andrew Fischer, Alicia Zhang of Covington & Burling LLP, and Stephen Weissman and Bradley P. Smith of Gibson, Dunn & Crutcher LLP acted as legal advisors for Merck Sharp & Dohme LLC. Emily J. Oldshue of Ropes & Gray LLP acted as advisor for Centerview and Jefferies. Innisfree M&A Incorporated acted as information agent for Terns. Computershare Trust Company, National Association acted as transfer agent for Terns. Merck Sharp & Dohme LLC completed the acquisition of Terns Pharmaceuticals, Inc. (NasdaqGS:TERN) on May 4, 2026. Merck completed the cash tender offer, through a subsidiary, for all the outstanding shares of common stock of Terns at a purchase price of $53.00 per share, without interest and subject to any applicable tax withholding. As of the tender offer expiration at one minute after 11:59 p.m., Eastern Time, on May 4, 2026, 100,091,794 shares of Terns common stock were validly tendered and not validly withdrawn, representing approximately 86.36% of the total number of Terns’ issued and outstanding shares of common stock as of such date and time. All such shares have been accepted for payment in accordance with the terms of the tender offer, and Merck, on behalf of its subsidiary, will promptly pay for such shares. At the completion of the merger, Terns became a wholly-owned subsidiary of Merck and Terns’ common stock will no longer be listed or traded on the Nasdaq Global Select Market. In connection with the consummation of the Merger and pursuant to the Merger Agreement, effective as of the Effective Time, (i) each of Robert Azelby, Amy Burroughs, David Fellows, Jeffrey B. Kindler, J.D., Jill M. Quigley, J.D., Radhika Tripuraneni, M.D. and Heather Turner, J.D. ceased to be a member of the Board of Directors of Terns (the “ Terns Board ”) and ceased to be a member of any committees of the Terns Board on which such director served, and (ii) the directors of Purchaser as of immediately prior to the Effective Time, which consisted of Jon Filderman, Melissa Leonard and Dalton Smart, became the directors of the Surviving Corporation. The transaction is expected to be accounted for as an asset acquisition, resulting in a charge to research and development expense of approximately $5.8 billion, or approximately $2.35 per share, included in both second quarter and full year 2026 GAAP and non-GAAP results. Additionally, GAAP and non-GAAP EPS are expected to be negatively impacted by approximately $0.12 per share in 2026, representing costs associated with advancing TERN-701 and costs of financing. Computershare Trust Company, N.A acted as depository in the transaction.

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TERN: Positioned for Dominance – The Intrinsic Value of TERN-701 Points to $98.57

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TERN: Positioned for Dominance – The Intrinsic Value of TERN-701 Points to $98.57

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Merck Sharp & Dohme LLC completed the acquisition of Terns Pharmaceuticals, Inc. (NasdaqGS:TERN).

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