Merial and Intervet/Schering to be merged
FRANCE'S Sanofi-Aventis and Merck, which has plants in Tipperary and Carlow, agreed yesterday to re-forge ties in animal health -- combining the French drugmaker's Merial unit and Merck's Intervet/Schering Plough to take the top spot in the $19bn market.
The joint venture in its current shape would have an estimated 29pc market share compared with Pfizer's 20pc, combined sales of $5.3bn and staff of about 13,600.
The headquarters location has yet to be decided.
The equally split joint venture complements Merial's predominance in pets with Merck's stronger position in livestock and their geographical presence in a sector that is estimated to grow at an annual rate of 5pc, on average, until 2014.
Sanofi will pay Merck $250m on top of an extra $750m already agreed on last year when Sanofi bought Merck's stake in their Merial business for $4bn. At the time, both drugmakers said they would explore a tie-up.
The joint-venture will surpass Pfizer Animal Health if it wins anti-trust clearance from regulators in the United States, Europe and other countries.
Sanofi's Chris Viehbacher said growth would be supported by rising demand for food from a growing world population and an expanding middle class in emerging markets becoming pet owners. Also, more elderly people are taking pets as the world's population ages. The sector had been "pretty resistant and resilient", he added.
The deal could close as early as the end of 2010 depending on anti-trust regulators. (Reuters)