8-KMaterial AgreementsOther EventsExhibits & Filings

Merck & Co., Inc. 8-K Report, Material Agreement (Mar 11, 2010)

Filed March 11, 2010For Securities:MRK

Summary

This Form 8-K filing by Merck & Co., Inc. (MRK) on March 11, 2010, details an amendment to a material definitive agreement concerning the potential contribution of Merck's animal health business, Intervet, to Merial Limited. This move is part of a broader agreement with sanofi-aventis, where sanofi-aventis holds a call option to acquire this business in exchange for a 50% equity stake in the combined entity. The amendment clarifies the conditions and timeline for executing a Contribution Agreement, particularly addressing the involvement and potential proceedings of a Works Council. Investors should note that on March 9, 2010, Merck and sanofi-aventis jointly announced that sanofi-aventis had exercised its call option. This 8-K filing provides further procedural details and agreements surrounding the exercise and the path towards finalizing the transaction. The core of the transaction involves the combination of Merck's Intervet animal health operations with Merial, a joint venture, with sanofi-aventis potentially becoming a co-owner of this combined business.

Key Highlights

  • 1Merck & Co., Inc. (Merck) and sanofi-aventis have amended their Call Option Agreement related to Merck's Intervet Animal Health Business.
  • 2Sanofi-aventis has exercised its call option to acquire Merck's animal health business.
  • 3The business will be contributed to Merial Limited in exchange for a 50% equity interest in the combined entity.
  • 4The amendment specifies conditions and timelines for executing the Contribution Agreement, including considerations for the Works Council.
  • 5Merck and sanofi-aventis will collaborate to mitigate adverse effects from any legal proceedings initiated by the Works Council.
  • 6The amendment grants both parties additional termination rights for the Call Option Agreement under certain circumstances.
  • 7A joint press release on March 9, 2010, confirmed sanofi-aventis' exercise of its option.

Frequently Asked Questions

This filing primarily serves to announce an amendment to a material definitive agreement between Merck and sanofi-aventis. This amendment concerns the process and conditions for contributing Merck's animal health business (Intervet) to Merial Limited, following sanofi-aventis' exercise of its call option.

Merial Limited is the entity to which Merck's animal health business will be contributed. The transaction aims to create a combined entity involving Merck's Intervet operations and potentially merging it with or within Merial, in which sanofi-aventis would receive a 50% equity interest.

The Contribution Agreement's execution is contingent on receiving positive advice from the Works Council, the waiver of its rights, or the expiration of its standstill period (March 27, 2010), provided any legal proceedings initiated do not prevent the agreement's execution.

Sanofi-aventis exercising its call option signifies their intent to proceed with acquiring a stake in Merck's animal health business as outlined in the original agreement. This filing provides updates on the contractual mechanics and timelines leading up to the actual contribution and formation of the combined entity.