Given the increased number of position reductions disclosed today by Merck on the Q4 2009 earnings conference call, a discussion on the Yahoo! chatboard for the stock ensued. A frequent (and generally level-headed) commenter known as plm408 pointed out that most of the reductions were likely to fall outside of the legacy Organon's European operations -- for a specifically negotiated reason (with the EU authorities).
Here is a link to the original comment on Yahoo!:
. . . .one more thought on the loss of employees by Merck. When Schering-Plough purchased Organon, I believe Schering-Plough had to agree not to lay off European Organon employees in order to get approval from the EU. Merck will be tied to that agreement. Therefore, the reductions will come from the US, Canada, etc., not Europe. . . .
A cogent point, true enough, but if we are to believe Sanofi's CEO, any day now he'll announce that "New" Merial (wholly-owned by Sanofi, at the moment) will be "calling" all the Schering-Plough legacy Animal Health assets. [He said Sanofi was "highly likely" to exercise the call for the Intervet assets, last week on the Sanofi earnings call.]
That call option includes a very good chunk of "legacy" Organon Animal Health assets (from old Schering-Plough).
So, that "no fire" covenant with the ECC (and the EU, more broadly), would follow the employees -- that is, it would become Sanofi's to bear.
Now, that is good news for the Merck European Animal Health employees (except that now they'll work for Sanofi). But that would make all other legacy Schering-Plough, and New Merck European employees "fair game" -- as New Merck inevitably downsizes, marching to the 17,500 layoff goal.
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