Sanofi-Aventis (NYSE: SNY) and Merck (NYSE: MRK) are interviewing investment banks to handle the selloff of some animal health assets. The companies are rejoining forces on the animal health side, and to gain regulatory approval for their $5.3 billion combo, they'll probably have to divest some products. The sales are likely to be the last major chance for animal health players to pick up significant assets at a single go, Reuters notes.
Consultants from Vetnosis say the combo company may have to shed business that makes up as much as 12 percent of annual sales--that's $650 million--to make antitrust regulators happy. Areas of overlap include vaccines for everything from pets to poultry; parasite-control products, such as flea and tick treatments; and specialty vet drugs.
Merck's animal health operations--Intervet, gained through the Schering-Plough merger--has a strong line-up of livestock products, whereas Sanofi's Merial is more pet-oriented, Reuters reports.
Potential buyers include other Big Pharma players who have animal health businesses, such as Eli Lilly (NYSE: LLY) and Novartis (NYSE:NVS); it's unclear at this point whether the new joint venture will want to spin off assets in one big deal or through a series of smaller ones.
Either way, it's a big opportunity for the right buyers, a Vetnosis consultant tells the news service. "This is ... the last opportunity for players wishing to scale up through the acquisition of major brands with strong market positions," explains managing director Tim Evans, "and the final chance to attain a competitive position in the important veterinary vaccines category." And given pharma's drive to diversify, we could see some competition for those competitive products.
- get the Reuters story