Merck finds buyer for 2nd Puerto Rico plant slated to close

Merck ($MRK) put two of three plants in Puerto Rico on a hit list in 2013 as part of its efforts to cut costs and headcount. But after selling one last year to Sanofi's ($SNY) animal health unit Merial, it has found a buyer for the second, efforts that together will have saved about 400 jobs on the island.

Merck will sell its plant in Arecibo to American Industrial Acquisition Corporation (AIAC), which will add it to the 5 dozen other plants it has around the world making industrial products. The announcement was made Thursday by the Puerto Rico Industrial Development Co. (PRIDCO), which said that AIAC will pick up 200 Merck employees who faced losing their jobs.

Merck confirmed the sale in an emailed statement, saying: "This is part of Merck's ongoing consolidation of its global manufacturing network to focus on its pipeline and core business." The company declined to provide the terms of the deal or when it expected the deal to closed but also confirmed that AIAC was hiring the 200 employees who worked at the facility. 

PRIDCO said it has been told the plant will supply Merck with certain products until Merck can consolidate some of those into its operations at a plant in Las Piedras and transfer the rest to a third-party contract manufacturer. AIAC will then manufacture other products from the plant for other clients.

In December, Sanofi's Merial agreed to buy Merck's veterinary drug manufacturing facility in Barceloneta, Puerto Rico, from Merck Animal Health. It also agreed to keep on the 200 employees who worked at that facility.

Merck's operations in Puerto Rico will now be consolidated at its facility in Las Piedras, a site in which it has invested more than $100 million in recent years. Merck in the email said that "The Las Piedras site is one of only two facilities in the Merck global network dedicated to the development and launch of new products. The site is currently bringing online new manufacturing technologies to support the launch of three new Merck products."

- here's the announcement

Special Report: Top 10 animal health companies of 2013 - 2. Merck Animal Health - 3. Merial