Novartis mulls swapping animal-health ops with another business

Novartis (NVS) is reportedly considering an attempt to swap its animal-health division with a business owned by Merck (MRK) or another company.

The Swiss firm, which apparently has little use for the cash that a sale or IPO would bring, has its eye on Merck's over-the-counter drug business, although it's not clear whether the latter would be open to such an exchange.

Novartis' animal-health unit has drawn interest from German drugmakers Boehringer Ingelheim and Bayer (OTCPK:BAYZF), and from Eli Lilly (LLY).

From other sites
Comments (1)
  • twersskyd
    , contributor
    Comment (1) | Send Message
    It looks like Merck is serious this time.


    Subject: FW: Merck in the News


    NEW YORK, N.Y. ( - Merck will reduce its workforce by an
    unprecedented 120 percent by the end of 2013, believed to be the first
    time a major corporation has laid off more employees than it actually
    Merck stock soared more than 12 points on the news.


    The reduction decision, announced Wednesday, came after a year-long
    internal review of cost-cutting procedures. The initial report concluded
    the company would save $1.2 billion by eliminating 20 percent of its
    85,000 employees.


    From there, said a spokesperson, "it didn't take a genius to figure out
    that if we cut 40 percent of our workforce, we'd save $2.4 billion, and
    if we cut 100 percent of our workforce, we'd save $6 billion. But then
    we thought, why stop there? Let's cut another 20 percent and save $7


    "We believe in increasing shareholder value, and we believe that by
    decreasing expenditures, we enhance our competitive cost position and
    our bottom line," he added.


    Merck plans to achieve the 100 percent internal reduction through
    layoffs, attrition and early retirement packages. To achieve the 20
    percent in external reductions, the company plans to involuntarily
    downsize 16,000 non-Merck employees who presently work for other


    "We pretty much picked them out of a hat,".


    Among firms Merck has picked as "External Reduction Targets," or ERTs,
    are Quaker Oats, AMR Corporation, parent of American Airlines, Lockheed,
    Boeing, and Charles Schwab & Co. Merck's plan presents a "win-win" for
    the company and ERTs, said the Merck spokesperson, as any savings by ERTs would be passed on to Merck, while the ERTs themselves would benefit by the increase in
    stock price that usually accompanies personnel cutback announcements.


    "We're also hoping that since, over the years, we've been really helpful
    to a lot of companies, they'll do this for us kind of as a favor,".


    Legally, pink slips sent out by Merck would have no standing at ERTs
    unless those companies agreed. While executives at ERTs declined to
    comment, employees at those companies said they were not inclined to


    "This is ridiculous. I don't work for Merck. They can't fire me," said
    Kaili Blackburn, a flight attendant with American Airlines.


    Reactions like that, replied the Merck spokesperson "are not very


    Inspiration for Merck's plan came from previous cutback initiatives,
    said company officials. In January of 2005, for instance, the company
    announced it would trim 18,000 jobs over two years. However, just a year
    later, Merck said it had already reached its quota. "We were quite
    surprised at the number of employees willing to leave Merck in such a
    hurry, and we decided to build on that,".


    Analysts credited the short-term vision, noting that the announcement
    had the desired effect of immediately increasing Merck's share value.
    However, the long-term ramifications could be detrimental, said Morgan Stanley analyst Beldon McInty.


    "It's a little early to tell, but by eliminating all its employees,
    Merck may jeopardize its market position and could, at least
    theoretically, cease to exist," said McInty.


    The spokesperson, however, urged patience: "To my knowledge, this hasn't
    been done before, so let's just wait and see what happens."
    10 Dec 2013, 08:03 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs