The $41 billion merger of Merck & Company with Schering Plough is hinging on the companies’ animal health assets. To win regulatory approval for the deal, the companies must divest animal health holdings of one or the other company, reports Reuters.

The companies are seeking bids for both Schering's Intervet business and Merck's stake in its Merial joint venture. Once they review the bids, the companies will decide which business to sell, according to the Reuters report.

It would likely be easier for Merck to sell its Merial business, which it co-owns with Sanofi-Aventis, rather than for Schering Plough to sell the extensive Intervet business. With Sanofi-Aventis already owning half of Merial, it’s likely Sanofi will buy the remaining share.

In a related animal health industry development, Pfizer and Wyeth are also divesting animal health assets to clear the way for their $68 billion merger. The report says Bayer AG, Boehringer Ingelheim and Novartis AG may be interested buyers for those assets.

Both the Merck-Schering and the Pfizer-Wyeth animal health asset divestitures are expected to be completed within the next several weeks.

Read the full Reuters report.

Source: Reuters