Merck and sanofi-aventis, owners of Merial and Intervet Schering-Plough respectively, have announced that they will not be combining the two animal health businesses as had been planned since March 2010.
In a joint announcement today, the companies said they are discontinuing their agreement primarily because of the increasing complexity of implementing the proposed transaction, both in terms of the nature and extent of the anticipated divestitures and the length of time necessary for the worldwide regulatory review process. The companies agreed that ending their plan is in the best interests of both companies and their respective shareholders, as well as the employees of Merial and Intervet/Schering Plough.
Sanofi-aventis says it remains strongly committed to its animal health activities, which it will continue to develop under the Merial brand as a growth platform of its diversified health business. Merial is one of the world's leading innovation-driven animal healthcare companies dedicated to research, development, manufacturing and commercialization of veterinary pharmaceuticals and vaccines, that generated annual sales of US $ 2.6 billion in 2010.
Merck has also stated its commitment to animal health and Intervet/Schering-Plough, a global leader in the research, development, manufacturing and sale of veterinary medicines which generated sales of US $ 2.9 billion in 2010
As a result of termination, both Merial and Intervet/Schering-Plough will continue to operate independently.
Sanofi-aventis and Merck & Co., Inc. announced today that Sanofi-aventis has exercised its option to combine Merial with Intervet/Schering-Plough, Merck's Animal Health business.
The new joint venture will be equally-owned by Merck and Sanofi-aventis. The formation of this new joint venture is subject to execution of final agreements, antitrust review in the United States, Europe and other countries, and other customary closing conditions. The completion of the transaction is expected to occur in approximately the next 12 months.
Richard T. Clark, Merck Chairman, President and Chief Executive Officer said: "Merck has been in the animal health business for well over six decades and through this new joint venture, we will bolster our diverse portfolio and create a new global competitor poised for growth.
"This new joint venture delivers on Merck's commitment to customer focus by creating one of the broadest portfolios of animal health products and services in pharmaceuticals and biologics for millions of customers who include farmers, veterinarians and pet owners. The planned joint venture will have an attractive geographical network of global technology and expertise to provide health solutions based on customers' needs, which often vary regionally."
The worldwide animal health market reached $19 billion in 2008. Products for companion animals accounted for 40 percent of total sales while products for production animals accounted for the remaining 60 percent of total sales. This market is expected to grow at around 5 percent per year over the next 5 years, driven by a growing demand for animal proteins, as well as a strong consumer needs for companion animal health care.
The companies said that both Merial and Intervet/Schering-Plough will continue to operate independently until the closing of the transaction.
Merck, part owner of Merial, has announced a merger with Intervet Schering-Plough.
However, rumours that Merck plans to sell its 50% stake in Merial and move forward with Intervet Schering Plough are incorrect, according to Merck spokespeople.
They'll have to start thinking about what to call themselves soon. Merial-Intervet-Schering-Plough is a bit of a mouthful.