Big pharma abort engagement period
US-based Merck and France based sanofi-aventis have terminated their agreement to form a new animal health joint venture by combining sanofi-aventis’ animal health business Merial with Intervet/Schering-Plough, Merck’s animal health unit.
As a result, each party will keep its current, separate animal health assets and businesses.
Since the initial announcement about the intended combination on March 9, 2010, both companies have worked diligently to create the proposed animal health joint venture, including submitting requests for the required antitrust reviews.
Antitrust obstacles
The merger was aborted because antitrust authorities insisted that both parties should divest some divisions.
Due to the animal health merger the companies were obliged to divest activities with a value of $500 million. Particularly in the field of poultry health the new entity would become too dominant.
As a result of termination, both Merial and Intervet/Schering-Plough will continue to operate independently. The termination of the agreement is without penalty to either party and each party is responsible for its own expenses.
