Merial and Intervet to Merge in Animal Health Corporate Move by Parent Companies

by Fran Jurga | 9 March 2010 | The Jurga Report at

The face of the pharmaceutical side of horse health is set to change again in the next year, following an announcement today:

“(The French firm) sanofi-aventis and that sanofi-aventis has exercised its option to combine Merial with Intervet/Schering-Plough, Merck’s Animal Health business, to create a global leader in Animal Health. The new joint venture will be equally-owned by Merck and sanofi-aventis.

“The formation of this new animal health joint venture is subject to execution of final agreements, antitrust review in the United States, Europe and other countries and other customary closing conditions. The completion of the transaction is expected to occur in approximately the next 12 months.

“The enterprise value of Merial has been fixed at $8 billion and the enterprise value of Intervet/Schering-Plough at $8.5 billion, leading to a true-up payment of $250 million to Merck to establish a 50/50 joint venture. An additional amount of $750 million will be paid by sanofi-aventis, as per the terms of the agreement signed on July 29, 2009. All payments, including adjustments for debt and certain other liabilities will be made upon closing of the transaction.

“This new joint venture will offer a broader portfolio of animal health products and services in pharmaceuticals and biologics, as well as the ability to capitalize on growth opportunities in all fields and countries around the world.

“The worldwide animal health market reached $19 billion in 2008. Products for companion animals accounted for 40 percent of total sales while products for production animals accounted for the remaining 60 percent of total sales. This market is expected to grow at around 5 percent per year over the next 5 years, driven by a growing demand for animal proteins, as well as a strong consumer needs for companion animal health care. The companies said that both Merial and Intervet/Schering-Plough will continue to operate independently until the closing of the transaction.” (end of quoted announcement.

You can read the full announcement at the Merck web site.

What does this mean to the average horse owner? Probably not much. The animal health divisioons of these companies have been speculated on for over a year now following the acquisition of the bigger whole. Could and would and should the animal health companies be merged? Can agricultural vaccines and wormers and kitty flea products live under one roof?

We will find out.

In the cynical view, it might mean less competition for pricing for wormers and vaccines, but another way to look at it is that these companies are the economic engines that make many of the horse shows, rodeos, conferences and education events possible in the horse world. Their success is not just important to the average horse person–it’s required.

The same is true of the feed companies, supplement makers, saddlers, and on down the aisles of any trade show that you can think of. Companies may merge or appear and disappear but the economy of the horse world depends on the trip you make to the feed store every Saturday, or the time you spend on the computer comparing prices, or the regularly scheduled vet appointments to keep your horses up to date on shots and worming.

A portion of the everyday money you spend on your horse’s health goes around and around in a big endless circle. When that money stops, this blog stops. Your trail rides and horse shows stop. And your vet’s continuing education meetings stop.

Let’s wish Merck and sanofi-aventis the best of luck. We’re all somewhere in their equations, let’s hope their forecast of a bright future is correct for all animals, especially horses.

Follow @FranJurga on for more equestrian and horse health news!




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