The investment is believed to be worth hundreds of millions of pounds and will be the first non-US major “hub” for the global pharmaceutical company, which is known in America as Merck and Co.
It will be hailed as proof the UK can maintain and grow its reputation as a world-leading science centre despite claims that Brexit would trigger a massive “brain drain” and exodus of research funding.
The announcement came as the Government prepares today to publish its wider Industrial Strategy.
Ministers will paint MSD’s plans as a vote of confidence in their long-term plan to build Britain’s strengths and embrace technological change.
The agreement is part of “Sector Deal” partnerships, planned by the Government and backed by private sector co-investment, to cover Life Sciences, Construction, Automotive, and Artificial Intelligence.
MSD’s new “world-leading life sciences discovery research facility” will support 950 high-skilled jobs.
Announcing the agreement, Business Secretary Greg Clark said: “Our life sciences sector is one of the UK’s fastest developing industries, with a turnover in excess of £64billion, employing 233,000 across the UK.
“MSD’s commitment, and the wider Sector Deal investment we have secured, proves the process outlined in the Industrial Strategy can give companies the confidence and direction they need to invest in the UK.”
“It will ensure Britain continues to be at the forefront of innovation and represents a huge vote of confidence in our Industrial Strategy.”
Dr Roger M Perlmutter, MSD’s Research Laboratories president, said: “Strong discovery capabilities and the pursuit of scientific excellence are foundational to MSD’s mission to save and improve lives around the world.
“A new UK location will enable us to build on our proud legacy of invention and be an important contributor to the vibrant and rapidly growing UK life sciences community, while providing access for more collaborations within the European life science ecosystem.”
A further partnership waiting in the wings will see diagnostics specialists QIAGEN and Health Innovation Manchester develop a new campus in the city, creating up to 800 skilled jobs.
Sir John Bell, chairman of the Government’s Life Science Industrial Strategy Advisory Board, said: “Investments by world-renowned companies like MSD and QIAGEN demonstrate that the UK’s science base is truly world-leading and an exceptional national strength.
“It is clear that the UK can, through a collaborative partnership between Government, industry, academia, charities and the NHS, deliver the next wave of innovation that will benefit patients, transform the health care system, and generate economic growth and improved productivity.”
The wider Industrial Strategy aims to build on Britain’s strengths as open and innovative economy with high standards and a reliable rule of law.
It also aims to tackle weaknesses, such as low productivity.