Merck & Co. and Sanofi-Aventis announced in late March that they had decided to terminate an agreement to form a new animal health joint venture by combining Intervet/Schering-Plough, the animal health business of Merck, and Merial, the animal health business of Sanofi-Aventis.
Since March 2010, Merck and Sanofi-Aventis had taken steps to create the animal health joint venture, including submitting requests for antitrust reviews.
According to a press release, the companies chose to discontinue the agreement because of the increasing complexity of implementing the transaction, both in terms of the nature and extent of divestitures and the length of time necessary for the worldwide regulatory review process.
Merck and Sanofi-Aventis mutually determined that ending the plan would be in the best interests of the companies and their respective shareholders as well as the employees of Intervet/Schering-Plough and Merial.
As a result of the termination of the agreement, Merial and Intervet/Schering-Plough will continue to operate independently of one another. The termination of the agreement is without penalty to Merck or Sanofi-Aventis. Each party is responsible for its own expenses.
Intervet/Schering-Plough had sales of $2.9 billion in 2010, while Merial had sales of $2.6 billion. Pfizer Animal Health will remain the largest animal health business in the world, with sales of $3.6 billion in 2010.
Previously, Merck and Sanofi-Aventis had co-owned Merial as a joint venture. Sanofi-Aventis bought Merial after Merck acquired Intervet/Schering-Plough in 2009.