A couple of weeks back, the Street was abuzz with a neat-trick trade between Merck & Co. and Novartis: Merck would hand over its consumer-health business for Novartis' animal-health and vaccines units.
Yesterday, word was that Merck ($MRK) has some consumer-goods giants shopping its consumer-health aisle.
Now, sources are telling Bloomberg that bidders are circling Novartis' ($NVS) vaccines business, too.
Here's the scoop, according to Bloomberg: Merck and Novartis are still talking swap, but putting a value on each of the assets up for trade is sticky business. So, Novartis has talked to Eli Lilly ($LLY) and Bayer about a potential animal-health deal--and with unnamed bidders for vaccines.
Analysts have said that Novartis' vet business could be worth about $4 billion. Bloomberg's sources put the value of the vaccines side of things at about $1 billion. As for Merck's consumer-health business, Reuters sources yesterday figured a sale is worth up to $8 billion to $10 billion.
Apparently, Novartis would prefer to trade Merck for its consumer business, because it wants to save its cash for pharma investments. To make the swap work, Novartis might have to hand over some cash to augment the animal-health and vaccines assets, Bloomberg's sources said.
Unit sales are all the rage in Big Pharma these days. For both Novartis and Merck, talk of selling or trading away smaller units is part of an overall asset-review process. Novartis has been assessing its various businesses to determine whether to sell, spin off, partner up, or otherwise remake them into more productive players. Merck is evaluating its operations in a similar fashion.
- read the Bloomberg story
Special Reports: Top 10 Pharma Companies by 2012 Revenue - Merck - Novartis