Sanofi, Merck Create Largest Animal Health Company

The combined business would hold 29% of the market with sales of about $5.3 billion, making it the leader in the sector.

French pharmaceutical giant Sanofi-Aventis and U.S. group Merck announced on March 9 they would join forces to create the world's biggest animal health company. The companies will own an equal share in the joint venture, which will combine Sanofi-Aventis's Merial unit with Merck's Intervet/Schering-Plough.

The combined business would hold 29% the market with sales of about $5.3 billion (3.9 billion euros), making it the leader in the sector ahead of Pfizer's animal health unit Fort Dodge.

Merck said the animal health market was expected to grow at around 5% per year thanks to an increasing demand for animal proteins and strong demand from consumers for health care for their pets.

"The upcoming combination of Merial and Intervet/Schering-Plough is an exciting opportunity for Sanofi-Aventis to create with Merck a leading company in the Animal Health strategic and growing sector," Sanofi-Aventis Christopher Viehbacher said.

Sanofi-Aventis decided to exercise its option to merge its animal health division with Merck's unit. The option has been available since July 29 when Sanofi-Aventis bought Merck's stake in Merial for four billion dollars. The deal will cost the French group one billion dollars -- a payment of $250 million to Merck and $750 million under the terms of the July 2009 agreement.

"Merck has been in the animal health business for well over six decades and through this new joint venture, we will bolster our diverse portfolio and create a new global competitor poised for growth," Merck chief executive Richard Clark said.

Copyright Agence France-Presse, 2010

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