Canaccord Genuity Morning Coffee on Merck & Co. (MRK) and Sanofi-Aventis (SNY): So Long, Farewell, Au Revoir
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Price: $130.02 +2.38%
Rating Summary:
24 Buy, 4 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
24 Buy, 4 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Canaccord Genuity Morning Coffee on Merck & Co. (NYSE: MRK) and Sanofi-Aventis (NYSE: SNY): So long, farewell, au revoir
Canaccord analyst said, "French pharmaceutical giant Sanofi-Aventis and U.S. based Merck & Co. announced that they have terminated the plan to combine their veterinary drug and vaccines businesses which had been announced a year ago. A joint statement from the companies said they “are discontinuing their agreement primarily because of the increasing complexity of implementing the proposed transaction both in terms of the nature and extent of the anticipated divestitures and the length of time necessary for the worldwide regulatory review process.” If the proposed JV had gone through, it would have created the largest animal health company on the planet, holding an estimated one-third of market share. The Wall Street Journal notes that it was Sanofi’s choice to terminate the agreement, as their recent acquisition of Genzyme (Nasdaq: GENZ) will require additional resources as the company faces patent expiries on several key medicines. Aurel BGC says the termination should not have a material affect on Sanofi given the small size of the business relative to the group. However, they believe it could be disappointing to investors as the JV would have created several cost saving synergies. Merck may see a positive from the termination as its earnings will no longer be diluted in the first 12 months following the deal, and JP Morgan also notes that Merck no longer faces the potential divestiture of its animal-health assets to appease anti-trust regulators."
Canaccord analyst said, "French pharmaceutical giant Sanofi-Aventis and U.S. based Merck & Co. announced that they have terminated the plan to combine their veterinary drug and vaccines businesses which had been announced a year ago. A joint statement from the companies said they “are discontinuing their agreement primarily because of the increasing complexity of implementing the proposed transaction both in terms of the nature and extent of the anticipated divestitures and the length of time necessary for the worldwide regulatory review process.” If the proposed JV had gone through, it would have created the largest animal health company on the planet, holding an estimated one-third of market share. The Wall Street Journal notes that it was Sanofi’s choice to terminate the agreement, as their recent acquisition of Genzyme (Nasdaq: GENZ) will require additional resources as the company faces patent expiries on several key medicines. Aurel BGC says the termination should not have a material affect on Sanofi given the small size of the business relative to the group. However, they believe it could be disappointing to investors as the JV would have created several cost saving synergies. Merck may see a positive from the termination as its earnings will no longer be diluted in the first 12 months following the deal, and JP Morgan also notes that Merck no longer faces the potential divestiture of its animal-health assets to appease anti-trust regulators."
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