WHITEHOUSE STATION, N.J. ( TheStreet) -- Merck ( MRK) and France's Sanofi-Aventis ( SNY) plan to combine their animal health businesses.

The combination of Sanofi's Merial unit and Merck's Intervet/Schering Plough will be equally-owned by both companies, which said Tuesday the completion of the transaction is expected to occur in roughly the next 12 months.

Merial makes the Frontline flea product for cats and dogs and its operations are predominantly located in the Americas. Intervet/Schering-Plough focuses mainly on vaccines for farm animals and can be found mostly in Europe.

The companies said the combined operation will gain a significant piece of the $19 billion worldwide animal health market.

Sanofi will pay Merck $250 million to establish the joint venture. In addition, Sanofi will pay Merck $750 million under a prior agreement.

Merck sold its 50% interest in Merial to Sanofi for $4 billion in cash in July 2009. The companies signed a call option agreement then, allowing Sanofi to choose to combine the animal health businesses.

Merck and Sanofi will have a share of about 29% in the global market for medicines for pets and livestock, according to the Associated Press. That's ahead of the current leader, Pfizer's ( PFE) Fort Dodge unit, which has about 20% of the market.

-- Reported by Joseph Woelfel in New York.

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