Sanofi-Aventis will acquire Merck & Co's 50% stake in Merial Limited in a cash deal worth $4bn.
Sanofi-Aventis will now own 100% of Merial, a leading animal healthcare company, which previously existed as a 50/50 joint venture between Merck and Sanofi-Aventis.
In addition to the Merial agreement, Merck, Sanofi-Aventis and Schering-Plough have announced the signing of a call option agreement, which allows Sanofi-Aventis the option to combine the Intervet/Schering-Plough Animal Health business with Merial as an animal health joint venture owned equally by the new Merck and Sanofi-Aventis following the closing of the Merck/Schering-Plough merger.
Merck chairman, president and chief executive officer Richard T Clark said that these agreements would enable the company to proceed expeditiously with the closing of its merger with Schering-Plough, and also gain an outstanding animal health business.
"We are pleased that Sanofi-Aventis will purchase Merck's interest in Merial, the successful joint venture we built together," said Clark.
The sale of Merck's interest in the Merial joint venture is subject to clearance by the European antitrust authorities.
Merck expects the transaction to be complete before its planned merger with Schering-Plough is finalised, which is expected to occur during the fourth quarter of 2009.