Merck & Co. Inc. (MRK Quick QuoteMRK - Free Report) announced that it will acquire the controlling interest in Vallée S.A., a Brazil-based privately held producer of animal health products.

Under the terms, Merck’s animal health business will acquire 93% of Vallée’s shares for $400 million, based on current exchange rates. The transaction is subject to regulatory review and closing conditions. However, Merck has not announced a closing date for the deal.

Benefits for Merck’s Animal Health

Under this deal, Vallée’s extensive product portfolio, consisting of over 100 products across parasiticides, anti-infectives and vaccines, for livestock, horses, and companion animals, will be integrated with Merck’s animal-health segment.

The acquisition will strengthen Merck’s presence in Latin America and help to respond more quickly and effectively to the region’s needs. Latin America, which contributes 11% to the world food production, is an important driver of the agriculture industry. A significant number of cattle across the region are vaccinated using Vallée’s products.

We note that Merck has been pursuing strategic acquisitions to boost its animal health. In Nov 2015, the company had acquired Harrisvaccines, Inc., a privately held company that develops, manufactures and sells vaccines for food production and companion animals.

Merck currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include GW Pharmaceuticals plc , ANI Pharmaceuticals, Inc. (ANIP Quick QuoteANIP - Free Report) and United Therapeutics Corporation (UTHR Quick QuoteUTHR - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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