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A carousel of companies: Inside the industry consolidation of 1990-2000

With the animal health sector currently experiencing a temporary lull in major M&A deals, the recent company rankings have remained fairly stable. However, to understand today's industry landscape, a history of consolidation has to be reviewed. Editor Joseph Harvey dug up Animal Pharm's time capsule to inspect over 25 years of comings and goings. 

If you are new to the animal health industry, the names on the list of leading companies from 1990 may seem completely alien and unfamiliar.

However, those who have been in the industry longer will know these names all form the DNA of the sector's top firms today. Consolidation has been inescapable in animal health over the last two decades, rendering the list below – Animal Pharm's oldest industry rankings – an index of defunct, acquired, merged and renamed businesses.

More analysis

For more about the history of M&A in the animal health industry, read Animal Pharm's table of important deals from 1995 to 2015, as well as recent industry rankings analysis.

A new top 50 report will be published by Animal Pharm this year, featuring more in-depth analysis of the industry's companies.

Of the 20 firms at the top in 1990, only Bayer Animal Health and Boehringer Ingelheim Animal Health remain under the same guises today. It is no surprise Dr George Gunn told Animal Pharm earlier this year: "Every company I've worked for doesn't exist anymore."

In 1990, the animal health market was worth only $9.9 billion globally. This is reflected in the size of the annual revenues at the time – there was not one firm with yearly sales in excess of $1bn, while only around $700 million separated the whole of top 20.

All the companies in the 1990 rankings, aside from BASF, were part of larger human pharmaceutical groups – something that can only be attributed to six companies in the most recent standings from fiscal 2016.

Many of these companies have been acquired, with their assets and brands now spread over several different portfolios among today's leaders.

It should also be noted the Animal Pharm rankings used to include several companies that only operate in the animal nutrition market. This is not the case anymore and firms featured in the top 20 have to record a portion of their revenues from pharmaceuticals, vaccines or diagnostics.

Animal health industry rankings in 1990

Company

Sales in 1990 ($ million)

What happened next?

1. Hoffmann-La Roche

780

Hoffmann-La Roche was among the biggest companies in the animal health industry from the 1980s until its vitamin and fine chemicals business was acquired by DSM in 2003. It sold its medicated feed business to Alpharma in 2000.

2. Rhône-Poulenc

693

Became part of Aventis after merging with Hoechst in 1998.

3. Pitman-Moore (Imcera Group)

623

Changed name to Mallinckrodt in 1995 and then was bought by Schering-Plough in 1997.

4. MSD Agvet

615

Merged with Rhône Mérieux to create Merial in 1997.

5. SmithKline Beecham

569

Bought by Pfizer in 1994.

6. Bayer Animal Health

565

Is now one place higher in the rankings and is the fifth-largest animal health business.

7. Pfizer Animal Health

510

Now trading as Zoetis – the biggest animal health company – following a spin-out from Pfizer.

8. BASF

444

Sold its premix business to Nutreco in 2007 but retains many animal nutrition assets.

9. Hoechst

384

Became part of Aventis after merging with Rhône-Poulenc in 1998.

10. Elanco

350

Now the fourth-largest business in the animal health industry.

11. Ciba-Geigy

284

Became part of Novartis Animal Health following merger with Sandoz in 1996.

12. American Cyanamid

270

American Home Products (Wyeth) bought American Cyanamid in 1994. Wyeth merged with Pfizer in 2010.

13. Upjohn

258

Merged with Pharmacia in 1995. Acquired by Pfizer in 2003.

14. Solvay Animal Health

250

Acquired by American Home Products (the previous name of Wyeth) in 1997. Wyeth merged with Pfizer in 2010.

15. Sanofi

245

Formed Sanofi-Aventis in 2004 through a merger. Begun Merial as a joint venture with Merck and retained the animal health business via acquisition. Now part of Boehringer following a merger in 2017.

16. Fort Dodge

174

Became part of Pfizer in 2009.

17. Intervet (Akzo Nobel)

158

Was bought by Schering-Plough in 2007.

18. Schering-Plough

130

Bought by Merck in 2009.

19. Boehringer Ingelheim

107

Currently the second-biggest animal health firm globally.

20. Takeda

93

Takeda sold its feed additive and vitamin divisions to BASF in 2000 and 1999. It merged its animal health division with Schering-Plough in 2000.

 

Ten years later, only nine names from the 1990 table remained at the top of the rankings. However, there were three companies in the billionaire's club.

The 2000 list has more in common with recent standings than the rankings from 1990 – nine companies featured below also appear at the top of 2016's leader board.

Animal health industry rankings in 2000

Company

Sales in 2000 ($ million)

What happened next?

1. Merial

1,394

Now part of Boehringer's animal health division.

2. Hoffmann-La Roche

1,110

Sold its vitamin and fine chemicals business to DSM in 2002. Then Alpharma purchased its medicated feed business in 2000.

3. Pfizer Animal Health

1,053

Now trading as Zoetis – the biggest animal health company – following a spin-out from Pfizer.

4. Intervet

936

Was bought by Schering-Plough in 2007. Now under Merck's ownership.

5. Bayer Animal Health

917

Sill operating under the same guise.

6. Fort Dodge

797

Bought by Pfizer in 2009.

7. Schering-Plough

720

Purchased by Merck in 2009.

8. BASF

685

Sold its premix business to Nutreco in 2007 but retains many animal nutrition assets.

9. Elanco

669

Still going strong in the industry's top five.

10. Novartis Animal Health

641

Acquired by Elanco in 2014.

11. Aventis

529

Became Sanofi-Aventis as part of a merger in 2004. Renamed Sanofi in 2011 and animal health business sold to Boehringer in 2017.

12. Degussa

455

Now part of Evonik.

13. Pharmacia

442

Merged with Upjohn in 1995. Acquired by Pfizer in 2003.

14. IDEXX Laboratories

367

Still the leading veterinary diagnostics company globally.

15. Alpharma

320

Bought by Pfizer in 2011.

16. Virbac

298

Now part of the industry's top 10 companies.

17. Boehringer Ingelheim

275

Is the second largest animal health firm globally after merger with Merial.

18. Ceva Santé Animale

140

Is now a $1bn business in the industry top 10.

19. Phibro Animal Health

135

Currently the tenth largest animal health business.

20. Vétoquinol

102

Has moved up to 13th in the industry rankings.

So, can the same turnover of companies be expected by the time the 2025 rankings are published? Possibly not. There are currently eight animal health firms with annual sales over $1bn, with other mid-sized firms growing rapidly.

Naturally, the animal health industry has hit an equilibrium whereby the biggest businesses are now of a size that makes the over-sized deals hard to execute.

It is hard to see any more deals being concocted amongst top 10 players, with leading firms dedicating M&A monies to bolt-on purchases. This means M&A is likely to come amongst players further down the standings – a trend highlighted by the recent coming together of Ecuphar and Animalcare to create a more competitive European player on the cusp of the top 30.

Animal Pharm predicts the leading names in the industry may be sticking around a little longer than their predecessors.


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