Tag Archives: Novartis Rumor Analysts Catherine Arnold Q3 2010 Offerings Goldman Sachs Banc of America Morgan Stanley JP Morgan Credit Suisse Bear Stearns December 8 2011 January 13 2014

Merck (Sorta’) Opens Up — Broad “Strategic Options” Possible — Year End 2014 Completion?

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.

Here is the Merck statement, in full, and a condensed MSM version, here:

. . . .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.

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An Opportunity For The CEO To Put Some Rumors To Rest — On Monday Afternoon?

Mr. Frazier always speaks at the JP Morgan Chase conference, live.

He will be there Monday afternoon, for the 32nd Annual Healthcare Conference, in the City by the Bay.

Will he deny the likely Goldman-generated rumors?

Will he even mention them, beyond the ongoing “we are always evaluating options” mantra?

Who knows? I’ll listen in, just in case. From the wires today, then:

. . . .Merck, known as MSD outside the United States and Canada, announced today that Kenneth C. Frazier, Merck’s chairman and chief executive officer, is scheduled to present at the 32ndAnnual J.P. Morgan Healthcare Conference in San Francisco on January 13 at 4:00 p.m. PST (7:00 p.m. EST). Investors, analysts, members of the media and the general public are invited to listen to a live audio webcast of the presentation. . . .

Do stay tuned — but as I’ve said — even if a big, splashy $5 billion multi-step swap deal gets announced, it will be a dickens to get closed. No. 2 can’t easily add assets of this size, in these highly concentrated markets, without a lot of regulators (and competitors!) taking notice — and squawking.