Drugmakers Merck & Co (MRK.N) and Schering-Plough Corp (SGP.N) have received requests from U.S. antitrust regulators for more information on their proposed merger estimated to be worth more than $40 billion.
Despite the second request from the Federal Trade Commission, the companies said on Monday they still expect the deal to close in the fourth quarter.
A Schering-Plough spokesman said the FTC request was primarily related to the companies' animal health businesses. Merck previously said it was exploring divesting its stake in its animal health venture with Sanofi-Aventis (SASY.PA) or selling a similar unit at Schering as part of the planned merger.
The companies said they had anticipated the FTC request and would cooperate fully.
Merck's acquisition of Schering, pegged at $41.1 billion when it was announced in March, would unite the makers of the cholesterol drugs Zetia and Vytorin.
Linda Bannister, a pharmaceutical analyst at Edward Jones, said she was not overly concerned about antitrust obstacles to the deal.
I think the issue is related to the animal health business specifically, Bannister said. I think there are plenty of other big pharma companies that are willing to take a look at those assets.
She added, I would be surprised if the merger doesn't close as planned.
Chul Pak, a former assistant division director at the FTC, said that he also expected the deal to be approved. The FTC is also looking at another pharmaceutical megamerger -- Pfizer's (PFE.N) purchase of Wyeth (WYE.N).
What makes this interesting (the two big mergers) is what does that do to the international landscape of players? said Pak, now an antitrust partner at Wilson Sonsini Goodrich and Rosati. I don't think that (the merger) will be...ultimately blocked.
Merck shares closed down 73 cents, or 2.8 percent, at $25.18 on the New York Stock Exchange. Schering was off 46 cents, or 1.9 percent, at $23.34, also on the NYSE.