Sanofi And Merck Drop Animal Health Merger

One year after announcing the deal, Merck & Co. and Sanofi-Aventis have terminated their agreement to create an animal health joint venture. The venture would have combined Sanofi’s Merial business with Merck’s Intervet/Schering-Plough unit to create an industry leader with $5.5 billion in annual sales. Instead, the companies will retain their separate animal health businesses, which leaves Merck ranking second and Sanofi third after Pfizer. Merck acquired Intervet with its 2009 takeover of Schering-Plough. To avoid antitrust issues in that acquisition, Merck sold Sanofi its 50% share in Merial, their then-12-year-old joint venture, for $4 billion. In March 2010, Merck and Sanofi decided to try to create an even larger joint venture. When the agreement was announced, Sanofi CEO Christopher A. Viehbacher said he expected scrutiny by antitrust authorities but viewed any potential divestitures as being “very manageable.” Despite their efforts to make it work, the two firms scrapped the idea after it became apparent that the anticipated amount of divestment and the time required for regulatory review made the plan too complex.