Monday, February 28, 2011

Merck's FujiFilm Deal: More Of Schering-Plough, Busted-Up

Recall that Diosynth was part of legacy Schering-Plough -- making it another piece of the bust-up/yard sale, just delayed by 18 months (per Bloomberg):

. . . .The company will buy BioManufacturing Network Diosynth RTP LLC of Research Triangle Park, North Carolina, and MSD Biologics (U.K.) Ltd., based in Billingham, England. The deal for the units, which generate about 13 billion yen in sales a year, should be completed by early April, Matsumoto said. . . .

Fujifilm plans to triple sales in health care in the next decade as the market for supplying biologic vaccines and drugs is expected to increase by 15 percent a year, it said. The deal comes as sales from its imaging solutions, which includes color films and digital cameras, fell 16 percent last fiscal year as more consumers use smartphones for taking photos. . . .

As a side-note, there is little doubt that Fuji is in a tight spot, with the contiuning (and likely permanent) decline of traditional chemical films. That said, I am not at all sure that operating vaccine manufacturing plants is going to be the right answer for Fuji's manifold ills.

For the core mission of this blog, though, this is yet another guidepost pointing to the now-inescapable destination: the Schering-Plough to Merck deal was always going to be a "bust-up play".

UPDATE: There is almost no doubt that this deal will clear antitrust review quickly -- even though it is likely north of $500 million in aggregate value. Fujifilm will be a decidely unconcentrated buyer, here -- this transaction should be granted early termination of the applicable waiting period, under Hart-Scott-Rodino.

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