The French drugmaker Sanofi is considering selling its animal health division, Merial, as the drive towards greater consolidation within the pharma sector continues. Merial produces many well-known brands for use with livestock, including Ivomec, Trivacton and Trodax.

Merial recorded sales of just under €2.1bn in 2014 and the latest figures released by its parent Sanofi for the 2015 third quarter show that the animal health business is performing strongly, with an 18% increase in sales to €607m for the three months to the end of October. Operating profit during that period grew by a quarter to €155m.

The pharma industry has been in consolidation mode over the past few years as some of the major companies like Sanofi seek to streamline their businesses and offload non-core assets.

In a statement released this morning, Sanofi chief executive Olivier Brandicourt said the pharmaceutical sector is undergoing a transformation unlike anything ever seen before. As such, he said he would be defining new priorities for Sanofi.

Synergies

“The company will remain diversified, but with a portfolio refocused on areas where we can win, and innovation driven to improve lives of millions of people,” he said. Brandicourt added that Sanofi would “explore strategic options” for Merial. Despite it being one of the most profitable businesses in the animal health sector, Brandicourt feels the synergies it offers are limited with other Sanofi businesses.

Consolidation within the global animal health sector has intensified in recent years. Last year, Novartis sold its animal health division to Eli Lilly for close to €5bn, while Pfizer spun off its animal health business, Zoetis, in an initial public offering (IPO) which raised more than €2bn.