Aventis Accepts $65.5 Billion Takeover Offer
The French-German drug company Aventis has accepted an offer from a once-hostile bidder, Sanofi-Synthélabo, of 55.3 billion euros ($65.5 billion), 14 percent higher than Sanofi’s original bid in January. The new company will be called Sanofi-Aventis, despite the fact that Aventis is about twice as large as Sanofi, and the Sanofi chairman and chief executive, Jean-François Dehecq, will be chairman of the management committee. The committee will be split equally between Aventis and Sanofi executives.
“We are pleased to have reached an agreement that recognizes the value of Aventis from a financial standpoint, as well as the talent and expertise of our employees,” the Aventis chairman and chief executive, Igor Landau, said in a statement this morning.
The action came four days after the Swiss drug company Novartis said it would begin formal talks with Aventis about a merger. Novartis said Sunday night that it would withdraw its offer because none of its conditions for a deal had been met.
“Following Aventis’ decision to engage in discussions with Sanofi, at the strong intervention of the French government, Novartis decided not to proceed,” the company said in a statement today.
The agreement with Sanofi, based in Paris, satisfies the French government’s quest to make sure France remains home to a large pharmaceutical company. The combined Aventis and Sanofi will be the world’s third-largest pharmaceutical company, behind Pfizer and GlaxoSmithKline, with about $30 billion in sales in 2003.
The higher offer represented a shift for both Sanofi, which had steadfastly refused to alter its $60 billion bid for Aventis, made in January, and for Aventis, which had insisted that it would be a stronger company if it did not combine with Sanofi.
Sanofi is offering five of its shares, plus 120 euros ($142), for each six shares of Aventis stock, said a person close to the negotiations. The previous offer was five shares of Sanofi stock plus 69 euros for each six Aventis shares. Sanofi is offering 1.66 newly-issued American Depository Receipts and 20 euros for every Aventis American Depository Receipt.
Thirteen of the 16 members of Aventis’s board voted to approve the deal, after a seven-hour board meeting on Sunday. Two employee representatives on the board voted against the deal, and Kuwait Petroleum Corp., the company’s largest shareholder, abstained. Even as the board was meeting, French government officials, who have been eager to have Aventis remain a French company, were promoting the benefits of a combination with Sanofi.