Merck (MRK) and Sanofi-Aventis (SNY) recently announced that they will no longer pursue their plans of combining their animal health segments. The companies mutually terminated their deal which was announced on March 9, 2010.
Sanofi and Merck were looking to set up a joint venture (JV) by combining Sanofi’s animal health business, Merial, with Merck’s animal health business, Intervet/Schering-Plough. However, the companies decided to terminate the deal due to the complexities involved in completing the transaction.
Prior to the termination of the deal, Merck and Sanofi were expecting to close the deal in the third quarter of 2011, representing a delay from previously announced timelines. The animal health segments posted combined sales of about $5.5 billion in 2010.
Going forward, Sanofi and Merck intend to conduct their animal health businesses separately. While Sanofi’s Merial posted sales of $2.6 billion in 2010, Merck’s Intervet/Schering-Plough delivered sales of $2.9 billion in 2010.
Large Players in Animal Health Segment
Other players in the animal health segment include companies like Eli Lilly (LLY), Pfizer (PFE), and Novartis (NVS) among others.
Over the past few quarters, Eli Lilly has been working on strengthening its animal health business. Earlier this month, Eli Lilly extended an irrevocable and unconditional offer for the animal health business of Janssen Pharmaceutica NV, a Johnson & Johnson (JNJ) company.
Eli Lilly’s animal health division, Elanco, markets products to more than 75 countries. With this deal, Eli Lilly is looking to strengthen its presence in the animal health market in Europe. Janssen is based in Belgium and focuses primarily on European markets.
In May 2010, Eli Lilly acquired the European marketing rights to several animal health product lines divested by Pfizer. The company also acquired a manufacturing facility in Sligo, Ireland, which is used for the production of animal vaccines.
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