Tonight it is SFGate's turn to swoon. . . largely reality- and clue-free.
As ever, we never say "never" -- but this one seems. . . particularly unlikely. Merck recently spent almost two years and hundreds of millions of dollars, likely, trying to make a similar deal work -- and satisfy US and EU Antitrust regulators. Need some MORE granularity? Do recall that the Merial Sanofi Animal Health JV series of deals of 2009 to 2010 vintage -- they ultimately foundered on antitrust concerns.
In the end, the Sanofi Merial deal had to be unwound. With Merck at No. 2 in Animal Health, it is hard to find a deal that doesn't raise monopoly flags. Doubly true when the No. 2 Consumer Health maker is looking to acquire Merck's smaller position -- in Consumer Health, via a swap.
Stripped of the niceties, that is two giants, agreeing to carve up two markets, and doling dominant positions in one, to each co-venturer. That's not been cricket -- since 1890. Here's a bit from SFGate.com -- but read it side by side with my longer piece, debunking the December version of this same rumor.
. . . .A swap with Merck would follow a trend in the industry in which Pfizer Inc., Bristol-Myers Squibb Co. and Abbott Laboratories have all in the last two years sold, spun off or split apart non-core businesses. Pfizer divested its animal health and nutrition units to focus on new brand-name drugs. Bristol-Myers last month sold its stake in a diabetes joint venture so it could put more bets on cancer, and Abbott last year split its drug unit into a new company, AbbVie Inc.
Merck says its animal-health business is the second-biggest in the industry, with $3.40 billion in sales in 2012. It’s consumer buiness, meanwhile, doesn’t have enough size. . . .
Could it still be done in a much smaller series of chunks, modified to be a three-, four- or five-way series of stepped trades? Maybe. Just maybe. But that will likely take five years to engineer. To that I say: "Good luck, Goldman Sachs!"
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