On October 28, 2009, the FTC approved Schering-Plough’s $41.1 billion acquisition of Merck, on the condition that certain divestitures were made.
On March 8, 2009, Schering-Plough proposed to acquire Merck and rename the surviving entity Merck. According to the FTC’s complaint, Schering-Plough’s acquisition of Merck would have reduced competition in a range of animal health markets in which the companies compete. The companies are two of the leading animal health suppliers in the United States, and the proposed acquisition raises significant concerns in markets where Merck, through Merial, and Schering-Plough directly compete. The FTC’s complaint also alleges that the transaction raises competitive concerns regarding human drugs known as NK 1 receptor antagonists. Nausea and vomiting are common side effects of both chemotherapy and surgery. Merck’s Emend® is the first and only NK 1 receptor antagonist approved for human use to treat such side effects. Schering-Plough, however, was in the process of licencing its own NK 1 receptor antagonist, rolapitant, to a third party when the company’s acquisition of Merck was announced. The FTC concluded that the transaction would have reduced the combined firm’s incentives to launch rolapitant, delaying or eliminating a future entrant into the market for NK 1 receptor antagonist drugs for nausea and vomiting.
To remedy these concerns, Merck must sell its interest in Merial Limited, an animal health joint venture with Sanofi-Aventis S.A., and Schering-Plough must sell its assets related to significant drugs for nausea and vomiting in humans.
The consent order resolves the Commission’s concerns regarding the proposed transaction’s potential anticompetitive effects.