PARIS (AP) - Pharmaceuticals company Sanofi-Aventis said Thursday it has agreed to pay $4 billion in cash to U.S. drugmaker Merck & Co. Inc. for its share in the two companies' animal health joint venture Merial.
Merck said earlier this year it would sell its 50 percent stake in Merial in order to assure antitrust regulatory approval of its merger with U.S. rival Schering-Plough, which also has a large veterinary health care business.
In a statement released jointly by Sanofi-Aventis and Merck, Merck's chairman Richard Clark said the deal "should enable us to proceed expeditiously with the closing of our merger with Schering-Plough in the fourth quarter as planned."
Sanofi-Aventis will own all of Merial, a joint venture it set up with Merck in 1997, following completion of the deal, expected in the fourth quarter, the companies said.
Once Merck and Schering-Plough complete their merger, Sanofi-Aventis has the option of combining Me rial with Schering-Plough's animal health business in a joint venture owned by Sanofi-Aventis and the new Merck, the companies said.
Sanofi-Aventis CEO Christopher Viehbacher said the potential combination would "create a new leader in this $19 billion global animal health market."
Merial sells some popular pet medicines — flea-and-tick blocker Frontline and chewable heartworm preventer Heartgard — plus Ivomec, which kills parasites in hogs and cattle. The venture had $684 million in first-quarter sales.
Kenilworth, N.J.-based Schering-Plough sells more than 15 animal medicine products, including antibiotics, fertility treatments and a number of vaccines for livestock; de-worming treatments for multiple animals; vaccines and treatments for ear infections and diabetes for dogs and cats, and the HomeAgain pet recovery system. The unit had sales of $630 million in the first quarter.
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