. . .Sanofi's CEO admits to the WSJ Health blog that:
. . . .The problem: Schering-Plough is bringing its own leading animal-health business to the Merck deal, and combining the two would create a juggernaut, with more than a quarter of the world market. . . .
While Sanofi's CEO now says it is "more likely than not" that he will exercise the call, it is far from clear that the ECC and FTC will allow one animal health company -- as a creation solely of merger and venture transactions (i.e., not natural, organic growth, over time) -- to effectively seize control of a quarter of the world's veterinary markets.
8 comments:
Believe me, I understand the concern and as an animal health employee I hope the combination doesn't happen -- but the authorities just ALLOWED a combination that will create one major player in animal health. Wouldn't they now want at least 2 huge players? And they can get there by allowing the Merial/ISP deal and requiring about 10-15% divestment.
Perhaps.
We shall see. I do think FTC and ECC will ultimately allow it -- I just hope that enough of each business will be placed in the hands of other market participants to preserve robust competition -- especially in anmal vaccines, where ranchers have no choice but to buy the product, for every head of livestock.
Namaste -- do stop back.
Don't worry, Dr. Obama will take care of everything.
Heh! Good one!
Namaste
They could sell I/SPAH off to Bayer and then exchange the money they gave to Sanofi to clear the FTC/ECC and resume their Merial joint venture.
Think BO got a message this evening?
In October FTC gave clearance for the Merck/Schering-Plough Merger. The order contains a “prior approval” provision to prevent the combined firm and Sanofi-Aventis from recombining their animal health businesses.
The order contains indeed a “prior approval” provision designed to preserve the remedial benefits of the Merial animal health divestiture to Sanofi-Aventis, because there is a credible risk that Merck/Schering-Plough and Sanofi-Aventis would combine their animal health businesses after the divestiture. Therefore, the order prohibits Merck from acquiring any of Merial’s animal health assets, or in any way combining the animal health businesses of Merck and Sanofi-Aventis, without the Commission’s prior approval.
Time is running out on the call option. If my calculations are right, Sanofi-Aventis has until Monday 8 Feb 10 to decide one way or the other. I wonder what is taking so long.
any updates?
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