So — let’s be clear, here. The so-called Novartis $5 billion asset swap idea is STILL PURELY A SPECULATIVE RUMOR. Novartis may or may not be a counter party, to one or more of the potential deals Merck might do. I will say that — if Merck seriously expects the deals (if any) to be “completed” by year-end 2014, the $5 billion swap is all but ruled out. Afterall, it took Merck almost two full years to get to the crater point, on the pending Merial/Sanofi Animal Health JV/swap. . . and there was no “return swap” of the consumer health businesses contemplated then. That was 2009 to 2011. So — I’d be quite surprised if Mr. Frazier would state in public that he believes he could begin and finish, such a complicated — and potentially-anti-competitive deal — all in under an elapsed year. He has to clear the EU. and the US DoJ Antitrust reviews, as well as similar ones in Japan and Australia — just to name a few. Not likely, as to the swap, then.
However, this certainly means Mr. Frazier — after the NYSE close, tonight, in San Francisco — will likely (only?) repeat these same phrases, below, over and over, in response to what is now certain to be VERY ardent questioning. Notice that no proposed, or actual counter party — or parties — are named, nor deal structures (of any sort), are outlined, in the below.
. . . .Merck & Co said on Monday it is pursuing strategic options for its animal health and consumer businesses and expects to complete any action it takes this year.
The company could “determine the most value-creating option for each and could reach different decisions about the two businesses,” Merck said in a statement ahead of a presentation at an investor conference later in the day.
In November, Merck said it was looking at options for separating these businesses. Last week, Reuters and other outlets reported that bankers said Novartis AG was discussing swapping its animal health and human vaccines businesses for Merck’s over-the-counter products unit. . . .
So — by all means — do stop back tonight. We will update this — but as no less an authority than Chief Justice William Howard Taft intoned (by inference), now over 110 years ago — the Sherman Act, at §1, and the Clayton Act, at §7, present significant obstacles to the likely Goldman Sach sourced rumor of a $5 billion straight up swap deal.