Merck to Sell Merial Stake to Sanofi for $4B

WHITEHOUSE STATION, N.J. (TheStreet) -- Merck(MRK Quote) signed an agreement to sell its 50% interest in the Merial animal health joint venture for $4 billion in cash to its venture partner Sanofi-Aventis (SNY Quote).

Sanofi will own 100% of Merial once the transaction closes. The acquisition is expected to be accretive to Sanofi's adjusted net income from the first year.

The companies also signed a call option agreement, in which following the closing of the merger of Merck and Schering-Plough(SGP Quote), Sanofi could choose to combine the Intervet/Schering-Plough Animal Health business with Merial to form a joint venture that would be owned equally by Sanofi and the new Merck.

"These agreements should enable us to proceed expeditiously with the closing of our merger with Schering-Plough in the fourth quarter as planned, and also gain an outstanding animal health business through Intervet/Schering-Plough Animal Health," said Merck Chairman and CEO Richard Clark, in a statement Thursday.