Research & Development World

  • R&D World Home
  • Topics
    • Aerospace
    • Automotive
    • Biotech
    • Careers
    • Chemistry
    • Environment
    • Energy
    • Life Science
    • Material Science
    • R&D Management
    • Physics
  • Technology
    • 3D Printing
    • A.I./Robotics
    • Software
    • Battery Technology
    • Controlled Environments
      • Cleanrooms
      • Graphene
      • Lasers
      • Regulations/Standards
      • Sensors
    • Imaging
    • Nanotechnology
    • Scientific Computing
      • Big Data
      • HPC/Supercomputing
      • Informatics
      • Security
    • Semiconductors
  • R&D Market Pulse
  • R&D 100
    • Call for Nominations: The 2025 R&D 100 Awards
    • R&D 100 Awards Event
    • R&D 100 Submissions
    • Winner Archive
    • Explore the 2024 R&D 100 award winners and finalists
  • Resources
    • Research Reports
    • Digital Issues
    • R&D Index
    • Subscribe
    • Video
    • Webinars
  • Global Funding Forecast
  • Top Labs
  • Advertise
  • SUBSCRIBE

Merck and Sanofi to Merge Animal Health Units

By R&D Editors | March 10, 2010

TRENTON, N.J. (AP) – Two of the world’s biggest pharmaceutical companies said they are uniting their animal health businesses in a deal to become the top dog in the veterinary industry.

Merck & Co. and France’s Sanofi-Aventis SA said they’ll jointly own the combined business, which will have a share of about 29 percent in the $19 billion-a-year global market for medicines for pets and livestock. That’s well ahead of the current leader, Pfizer Inc.’s Fort Dodge unit, which has about 20 percent of the market.

The joint venture will combine Sanofi’s Merial animal health business, the maker of Frontline flea and tick fighter and Heartgard for preventing heartworm infection, with Merck’s Intervet/Schering-Plough unit, which mainly makes vaccines and drugs for farm animals. Merial mainly operates in North America and South America, while Intervet sells in Europe and emerging markets.

“They are valuable assets and deserve to be together,” Merck Chief Executive Dick Clark told reporters during a conference call late Monday.

Merck shares fell 31 cents to close at $37.04 Tuesday while Sanofi’s U.S. shares rose 3 cents to $38.18.

Last year, Merial had sales of about $2.55 billion and Intervet had $2.74 billion, for a total of $5.3 billion.

Clark noted their products and countries of operation are complementary, adding anticipated growth will boost resources for research.

Sanofi-Aventis CEO Chris Viehbacher said the animal health market is expected to grow 5 percent a year through 2014, fueled by multiple trends.

The growing middle class in some developing countries is eating more meat, boosting the need for farm animals and thus livestock medicine. Meanwhile, the planet’s population is expected to grow 50 percent by 2050, further increasing food needs, and the increasing elderly population likes having pets, he said.

Viehbacher noted the animal health business was resilient during last year’s economic crisis.

“The pets business is more profitable, from a margin point of view,” he added, compared with prescription drugs subject to a “boom-bust cycle” as generic competition slashes sales.

The deal, expected to close in the next year, comes amid an unusual level of jockeying in the veterinary medicine business recently.

Pfizer, the world’s biggest pharmaceutical company by revenue, bought Wyeth in October for $68 billion in a diversification strategy that gave it strong businesses in vaccines, other biologic drugs, nonprescription medicines and veterinary medicines.

Pfizer already made some animal products, including Palladia, the first cancer drug specifically developed for dogs, so European Union regulators required Pfizer to divest some items to gain their approval for the Wyeth purchase. Just Monday, Eli Lilly & Co.’s animal health division bought the European rights to sell some Pfizer and Wyeth animal vaccines and other products, along with a vaccine manufacturing plant in Ireland, for an undisclosed amount.

Merck also did a megadeal to diversify, buying Schering-Plough in November for $41 billion for its biologic drugs, consumer health products, veterinary medicines and strong portfolio of drugs in development.

Merck, of Whitehouse Station, N.J., had sold animal health products from more than six decades and had a large business – a half-interest in Merial along with Sanofi-Aventis. To avoid a protracted overview by antitrust regulators that would hold up the Schering-Plough purchase, Merck sold its half of Merial to Sanofi for $4 billion in September.

That deal gave Sanofi-Aventis an option to later combine the full Merial business with Intervet, which Schering-Plough just acquired in November 2007.

Clark and Viehbacher told reporters that parts of their businesses may have to be divested after an expected nine- to 12-month review by antitrust regulators in the U.S. and Europe.

Given the slight discrepancy in the worth of the businesses – Merial is valued at $8 billion and Intervet/Schering-Plough at $8.5 billion – Sanofi-Aventis will give Merck a $250 million “true-up payment,” plus another $750 million payment required under its option to combine the two businesses.

Clark said combining them will bring annual savings, but that it is too soon to say how much or how many jobs might be eliminated out of their current combined total of 13,600. He said the companies also have yet to choose a leadership team or headquarters for the new business.

Related Articles Read More >

2025 R&D layoffs tracker: 83,543 and counting
Health-related innovation in Morocco highlighted by resident inventor patenting activity
ARPA-H funds $29M Ginkgo-led project to reshore pharma supply chains using wheat germ tech
DNA microscope offers new 3D view of organisms from the inside out
rd newsletter
EXPAND YOUR KNOWLEDGE AND STAY CONNECTED
Get the latest info on technologies, trends, and strategies in Research & Development.
RD 25 Power Index

R&D World Digital Issues

Fall 2024 issue

Browse the most current issue of R&D World and back issues in an easy to use high quality format. Clip, share and download with the leading R&D magazine today.

Research & Development World
  • Subscribe to R&D World Magazine
  • Enews Sign Up
  • Contact Us
  • About Us
  • Drug Discovery & Development
  • Pharmaceutical Processing
  • Global Funding Forecast

Copyright © 2025 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy | Advertising | About Us

Search R&D World

  • R&D World Home
  • Topics
    • Aerospace
    • Automotive
    • Biotech
    • Careers
    • Chemistry
    • Environment
    • Energy
    • Life Science
    • Material Science
    • R&D Management
    • Physics
  • Technology
    • 3D Printing
    • A.I./Robotics
    • Software
    • Battery Technology
    • Controlled Environments
      • Cleanrooms
      • Graphene
      • Lasers
      • Regulations/Standards
      • Sensors
    • Imaging
    • Nanotechnology
    • Scientific Computing
      • Big Data
      • HPC/Supercomputing
      • Informatics
      • Security
    • Semiconductors
  • R&D Market Pulse
  • R&D 100
    • Call for Nominations: The 2025 R&D 100 Awards
    • R&D 100 Awards Event
    • R&D 100 Submissions
    • Winner Archive
    • Explore the 2024 R&D 100 award winners and finalists
  • Resources
    • Research Reports
    • Digital Issues
    • R&D Index
    • Subscribe
    • Video
    • Webinars
  • Global Funding Forecast
  • Top Labs
  • Advertise
  • SUBSCRIBE