The two firms, Merck & Company and Sanofi-Aventis, said they would jointly own the business, which would control about 29 percent of the $19 billion annual global market for medicines for pets and livestock. That is well ahead of the current leader, Pfizer's Fort Dodge unit, which has about 20 percent of the market.

The joint venture will combine Sanofi's Merial animal health business, the maker of the Frontline flea and tick treatment and Heartgard for preventing heartworm infection, with Merck's Intervet/Schering-Plough unit, which makes vaccines and drugs mostly for farm animals. Merial operates mostly in North America and South America, while Intervet sells in Europe and emerging markets.

Last year, Merial had sales of about $2.55 billion and Intervet had $2.74 billion, for a total of $5.3 billion.

The chief executive of Merck, Richard T. Clark, noted their products and countries of operation were complementary, adding that anticipated growth would bolster resources for research.

The chief executive of Sanofi-Aventis, Christopher A. Viehbacher, said the animal health market was expected to grow 5 percent a year through 2014, fueled by multiple trends.

The deal, expected to close in the next year, comes amid an unusual level of jockeying in the veterinary medicine business recently.

Pfizer, the world's biggest pharmaceutical company by revenue, bought Wyeth in October for $68 billion in a diversification strategy that gave it strong businesses in vaccines, other biologic drugs, nonprescription medicines and veterinary medicines. Merck made a similar move, buying Schering-Plough in November for $41 billion for its biologic drugs, consumer health products, veterinary medicines and strong portfolio of drugs in development.

Shares of Sanofi rose 3 cents, to $38.18. Merck shares fell 31 cents, to $37.04.