New joint venture announced for Merial, Intervet/Schering-Plough

Paris, France

-- Merial and Intervet/Schering-Plough Animal Health will form a new joint venture, their parent companies announced today.

Widely speculated last year, this joint venture will be equally owned by Merck & Co. and Sanofi-aventis, company executives reported during a press briefing this morning.

The deal is subject to antitrust review in the United States, Europe and other countries, but it is expected to be finalized in the next 12 months. Until then, the companies will continue to operate independently.

"I am convinced that, together, we will create strong value in bringing broader and improved offerings in both pet and production animal segments," says Christopher A. Viehbacker, CEO of Sanofi-aventis. Richard T. Clark, Merck's chairman, president and CEO adds, "This new joint venture delivers on Merck's commitment to customer focus by creating one of the broadest portfolios of animal-health products and services in pharmaceuticals and biologics for millions of customers who include farmers, veterinarians and pet owners."

The enterprise value of Merial is $8 billion, while the enterprise value of Intervet/Schering Plough is $8.5 billion.

The worldwide animal-health market reached $19 billion in 2008, according to the companies. Products for companion animals accounted for 40 percent of total sales, while products for production animals accounted for the remaining 60 percent of sales. Additionally, the animal-health market is expected to grow 5 percent per year over the next five years, the companies report in a prepared statement. Market increases will be driven by a growing demand for animal protein and companion-animal health care, the companies say.