Merck & Co said its deal to create an animal-health joint venture with Sanofi-Aventis will close in the third quarter, or later than previously expected.

The agreement between the two companies allows either party to terminate the proposed joint venture without paying a break-up fee or penalty if the venture is not in place by March 30.

Merck disclosed the delay on Monday in a filing with the U.S. Securities and Exchange Commission.

The planned joint venture will include Sanofi's pet health-oriented Merial business and Merck's Intervet unit, which focuses on livestock. Merck acquired Intervet through its purchase late last year of U.S. drugmaker Schering-Plough.

Sanofi previously said the venture is expected to have annual sales of about $5.3 billion, and that divestitures required to close the deal should be in line with Sanofi's original assessment.

As previously disclosed, Merck said disruption from the integration process could hurt the joint venture's business. The formation of the joint venture is expected to weigh on Merck's earnings for the first 12 months after the transaction closes.

The two companies are expected to sell certain overlapping assets to gain regulatory approval for the joint venture. In December, Merck said the sale "process was continuing well and there is considerable interest."

At least three healthcare companies have made initial bids and remain in the race to buy available Merck and Sanofi assets, people familiar with the process previously told Reuters.

Germany's Bayer, its unlisted domestic rival Boehringer Ingelheim and Switzerland's Novartis have advanced to the second round of bidding for assets with about $500 million in annual revenue, several sources close to the bidders previously said.