As the deadline for Sanofi's call option, on the Intervet Animal Health assets looms, it seems some in the know suspect that antitrust authorities will require up to one third of the combined JV -- if created -- to be divested to satisfy anticompetitive concerns.
Potential bidders on these assets -- if offered -- would include Abbott, Pfizer, Fort Dodge, Janssen, Lilly, BIVI and Bayer -- along with a host of regional players not as widely known as the multinationals.
To the below very cogent observations, then -- I might add the cat and dog ear infection treatment markets -- both in the US, and large swaths of Europe, but I think this comment (graciously left in my inbox, over the weekend) gets it just about right:
. . . .Poultry's the biggest problem, we all know that. Cattle is possibly a problem, though I don't there's as much overlap as you might think at first glance (in the U.S. -- globally there are more issues). ButI think Lilly or Bayer would demand more than JUST poultry to get the deal done. My completely unscientific guess is that the "new" merial will be about 60-65% of what it would be without any divestitures.
February 7, 2010 3:45 PM. . . .
By the way, the Peter Loftus story on these topics, largely echoing mine, will run in tomorrow's Wall Street Journal. Cool.
4 comments:
Let me see: Merial's sales 2.6 Billion, Intervet's sales 3 billions. Total 5.6. If one third divested, then total after divesture is 3.8 Billion. Divide by 2 (for 50:50 JV), then sales for each parent is 1.9 Billion. The math does not make sense for a combo....
Or may be the math works for one of the parents (Sanofi)
Thanks for the great comments, here.
I think your figures don't account for the projected profit increases -- by cutting out duplicating expenses. That is what is meant by the "additional synergies" expected on that Sanofi slide, from end of July, 2009.
And, as some proof of this -- we know Sanofi wouldn't do it unless it intended to make additional profits -- the CEO of Sanofi just said this morning it was "highly probable" he's exercising the option in the coming weeks.
Namaste
Keep posting stuff like this i really like it
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