Thermo Fisher Scientific has launched a €10.4 billion bid for German genetic testing company Qiagen, the US-based company said today. 

Qiagen, which makes diagnostic kits for cancer and tuberculosis, said both its management and supervisory boards would recommend the offer to its shareholders. 

The company has also started shipping a new testing kit for the coronavirus to hospitals in China. 

At €39 per share, the offer represents a 23% premium to Qiagen's closing price on Monday, Qiagen said, adding the bid assumed €1.26 billion in net debt. 

Thermo Fisher, which provides scientific instruments, software and other services for scientific research and healthcare sectors, said the deal would generate $200m in synergies by year three following the deal's close.

"This acquisition provides us with the opportunity to leverage our industry-leading capabilities and R&D expertise to accelerate innovation and address emerging healthcare needs," Thermo Fisher CEO Marc Casper said. 

The Massachusetts-based company has a market valuation of around $120 billion, according to Refinitiv data. 

Qiagen CEO Thierry Bernard also welcomed a deal. 

"This strategic step with Thermo Fisher will enable us to enter a promising new era and will give our employees the opportunity to have an even greater impact," he said. 

The German-listed company said last November that it had started to review options, including a sale, after receiving indications of interest from potential suitors. 

However, the following month it said it had decided its best option was to remain a standalone business. 

Qiagen had been thrown into turmoil in October when its long-serving CEO Peer Schatz resigned and the company announced a reversal of its strategy, saying it would stop developing its next-generation genome sequencing machines and instead collaborate with industry leader Illumina. 

In February, the company beat analysts' expectations for quarterly sales and profits, citing savings generated following the decision to exit genome sequencing machines.