Drug giants join forces in world's biggest animal health group

FURTHER consolidation in the animal health world market emerged this week with the news that North America's Merck & Co and Europe's Sanofi-Aventis, two of the world's biggest drug companies, are merging their animal health businesses into a joint venture, making and marketing everything from bluetongue vaccines to pet products

The combined company will have a global market share of 29 per cent of the estimated $19 billion (12.7bn) worth of animal health product sales. This puts it well ahead of Pfizer's Fort Dodge unit with 20 per cent.

The new company will have operations across North America, Latin America, Europe and most emerging markets.

The animal health market covers pet products which account for 40 per cent of the total sales and which are generally regarded as the highly profitable end of the business. Pet product sales are rising by 5 per cent annually, despite the worldwide recession.

It is believed the range of animal livestock products complemented each other, with the possible exception of bluetongue vaccine, which both Merck and Sanofi currently manufacture.

"Merck has been in the animal health business for well over six decades, and through this new joint venture, we will bolster our diverse portfolio and create a new global competitor poised for growth," said Richard Clark, Merck's chief executive. "This creates one of the broadest portfolios of animal health products for millions of customers."

The combined company will have 13,600 employees and no estimate was given of post-merger economy savings.