Sanofi, Merck may be preparing to sell off some assets

Two huge drug manufacturers could be getting ready to sell off some animal health assets, worth some $1 billion, later this year, according to a Bloomberg news report.

Sanofi-aventis SA and Merck & Co. are reportedly preparing to sell the assets, possibly in order to comply with anti-trust regulations. Such a divestiture would most likely be required before the two companies can officially join their animal health divisions into one company.
The new joint venture, announced earlier this year, will be owned equally by Merck and sanofi-aventis, and will be a combination of Merial and Intervet/Schering-Plough.

Merial was originally a joint venture between Merck and sanofi, but sanofi paid $4 billion in cash for Merck’s 50 percent of the company in September of 2009. Merck was required to sell its share of Merial in order to avoid anti-trust issues, due to its $41 billion merger with Schering-Plough Corp., which included that company’s animal health operation, Intervet/Schering Plough.
As part of the Merial buyout, after the Merck - Schering-Plough deal closed, sanofi had the option to merge Merial with Intervet, which it exercised earlier this year.

The Bloomberg report said that potential buyers for the combined assets include Pfizer Inc., Bayer AG, Boehringer Ingelheim GmbH, Eli Lilly & Co. and Novartis AG.

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