How To Read An Occluded Crystal Ball: Merck's Animal Health Transactions-Space

At lunch time, Bloomberg has a piece out naming Merck as a potentially-interested party, in Novartis's Animal Health assets.

That's good as far as it goes. But then the article goes on to quote CEO Frazier, back at the Q3 2013 call, for the idea that maybe the whole of Merck's Animal Health businesses might be sold, or spun off. Again, anything is possible. But both Mr. Frazier, and CFO Peter Kellogg -- speaking later in time, than the October Q3 2013 call, at a mid-November 2013 Credit Suisse conference, have shaded the story a bit more toward a transaction inside Consumer Health, prior to Animal Health. And perhaps even to the exclusion of the latter.

Here's the bit -- do go read it all:

. . . .Merck said in October that its veterinary business may be divested or partnered outside the company, while Pfizer Inc. in June completed the spinoff of its Zoetis Inc. (ZTS) animal-health unit. . . .

Merck’s animal health business is the second-biggest in the industry, the company says, with $3.40 billion in sales last year. Ken Frazier, Merck’s CEO, has talked about possibly selling or spinning off the unit in a move that could mimic Pfizer’s decision last year to do divest units and focus the company on developing new human drugs. . . . Frazier praised the business’s performance though also said he’s trying to “determine whether these businesses are more advantageous inside or outside the company. . . .”

As I say anything is possible -- this one just doesn't seem. . . probable. Not today, anyway. More detailed -- and more recently-dated (November 12-13, 2013) -- explanation available here. Well, at least, that's my. . . $0.02.