Merck’s Frazier Says He Won’t Follow Pfizer in Splitting Company

Merck & Co. Chief Executive Officer Ken Frazier said he doesn’t plan on breaking up the company by splitting off businesses the way Pfizer Inc. and Abbott Laboratories are doing.

“My philosophy is fix what is broke, don’t do the fad of the day,” Frazier said at the Sanford C. Bernstein conference in New York today. “I remember a few years ago when people said it would be the diversified companies that were going to get the premium in the market.”

Pfizer in April said it will sell the company’s infant-nutrition business to Nestle SA for about $11.9 billion, part of CEO Ian Read’s plan to reduce the New York-based drugmaker’s size. Abbott said it would split into a pharmaceuticals manufacturer and a business focusing on medical devices, generic medicines and nutritional drinks by year-end.

Merck’s consumer and animal units complement its prescription drug business, Frazier said. He also said he doesn’t see any large deals that would create value.

Merck, based in Whitehouse Station, New Jersey, paid $49 billion in 2009 for Schering-Plough Corp., a deal that has taken a lot of effort to integrate, said Frazier. He said he doesn’t plan on doing another large deal and is instead focused on smaller, targeted biotech acquisitions.

Merck’s animal health business had $3.3 billion in sale last year and its consumer health unit, which sells over-the-counter medicines, generated $1.8 billion in revenue. Merck gets 85 percent of its revenue from prescription drugs and vaccines.


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