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Sanofi-Aventis may reportedly buy Merck's stake in animal-health venture - Update

Sanofi-Aventis SA (SNY) might buy Merck & Co.'s (MRK) stake in Merial, an animal-health venture between the two firms, and expand into the diagnostics market to revive growth, Bloomberg reported Friday. Merial is the world's third-biggest animal-health company and the stake could be worth about $2.6 billion.

Earlier in the week, Merck said it would buy rival Schering-Plough Corp. (SGP) in a $41.1 billion stock and cash transaction. Both Sanofi and Merck have products facing generic competition in the next few years.

Merial had sales of over $2.6 billion last year and has 5,000 people on its payroll. Its products include the Ivomec parasite treatment as well as Frontline flea and tick repellent. Merial was formed in 1997 by merging Merck's animal-health unit with a division of Rhone-Poulenc, a predecessor of Sanofi-Aventis.

In an interview to the news agency, Sanofi's Chief Executive Officer Chris Viehbacher said he plans to implement changes in the company's strategy and intends to move away from big drug researches and hefty acquisitions.

SNY closed Thursday's regular trade at $25.25, up $0.02 or 0.08%, on 5.35 million shares.

MRK shares ended Thursday's regular trade at $24.03, up $2.09 or 9.53%, on 38.39 million shares.

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