Monday, February 28, 2011

Now Confirmed: New Merial Launch Is Being Delayed By Antitrust Concerns

In keeping with my well-experienced conjecture (but mere conjecture, nonetheless) of about a month ago. . . Whitehouse Station today confirmed to Pete Loftus of the Wall Street Journal that the New Merial JV would not be up and running before the third quarter of 2011.

Merck's earlier projection was for a March 2011 closing on that deal. Sanofi's CEO made some public comments back in December 2010 that hinted at a later closing (like second half of 2011).

All in all, I am sure Pete is right -- that the antitrust regulators in the US and Europe are giving the JV a very close review -- as it stands, it could control nearly 30 percent of the worldwide animal health market -- if not tweaked by forced divestitures (like the one I mentioned last month)

. . . ."To ensure competition among companies in the industry, the regulators continue to look closely at the intended JV combination and how we address possible overlap in our portfolios," said Steve Campanini, a Merck spokesman. "We are executing the antitrust process with great care with the goal of leading it to successful approval. It is a process that varies with each transaction, and so it is difficult to predict precisely the timing. . . ."

Paris-based Sanofi said earlier this month it expected the deal to close in the 2010 first half. A spokesman declined immediate comment.

Merck and Sanofi knew from the start they would probably have to divest themselves of certain products to appease antitrust regulators. One possible area is poultry vaccines, for which their combined market share would be about 75%, the U.S. Federal Trade Commission said in a report in 2009. . . .

Wow -- that's a monopoly! Stay-tuned.

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