Pharmaceuticals-maker Sanofi-Synthelabo formally announced plans Monday to create the world’s third-largest pharmaceutical company after making a new, “friendly” bid for the Franco-German Aventis SA worth $65.5 billion.
The new offer has been approved by Sanofi’s board, its main shareholders Total SA and L’Oreal SA as well as by Aventis’ management and supervisory boards, a statement said.
The offer that ends a three-month hostile takeover battle was made public Sunday night by French authorities. The Sanofi statement on Monday provided details.
The merger — which must be approved by shareholders — would create the No. 3 largest pharmaceutical firm behind U.S. giant Pfizer Inc. and Britain’s GlaxoSmithKline PLC.
Sanofi said the sweetened offer was filed Monday in Paris, and will be filed in the United States and Germany during the next few days.
The new company would be called Sanofi-Aventis.
Jean-Francois Dehecq, chairman and chief executive of Sanofi-Synthelabo, is to be chairman and CEO of the new entity, the statement said. Sanofi-Aventis’ board would be made up of 17 members, including Dehecq, eight members chosen by Aventis and eight members selected by Sanofi.
The new company would have an audit committee, a remuneration committee, a scientific committee and a strategic committee, Sanofi said. Aventis and Sanofi would have equal representation in each committee.
French authorities quickly welcomed the deal. Prime Minister Jean-Pierre Raffarin’s government had sought to discourage Aventis’ attempts to negotiate a friendly merger with Switzerland’s Novartis AG. He said the Sanofi-Aventis deal was in France’s “strategic interests” because it would “maintain decision-making centers and jobs in France and Europe.”
Aventis had rejected Sanofi’s hostile Jan 26 cash-and-share offer, worth $55.2 billion, or $68.87 per Aventis share, at Friday’s closing price.
Novartis, which makes blood pressure treatment Diovan and the anti-leukemia drug Gleevec, withdrew from the race, signaling unwillingness to be drawn into a bidding war for Aventis against its government-backed rival.
“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, adding that it had made no formal offer and that its decision was final.
Only Thursday, Novartis had said it was entering merger talks with Aventis as a possible “white knight” bidder for the Strasbourg-based maker of anti-thrombosis drug Lovenox.
The following day, at the request of French Finance Minister Nicolas Sarkozy, Landau met Dehecq for their first direct talks in the three months since Sanofi launched its hostile bid.
A French government official, who asked not to be named, told The Associated Press on Sunday that Finance Minister Nicolas Sarkozy had put heavy pressure on Dehecq to raise his offer for Aventis.
The French prime minister had said last month that a tie-up between Aventis and Sanofi was in the “national interest.”
That position was reiterated by two government ministers on Sunday, even as Aventis directors were considering their company’s future.
Health Minister Philippe Douste-Blazy said in a radio interview that a deal between the French-based companies would be “a very good thing” for the country’s industry, while Industry Minister Patrick Devedjian told LCI television that the government remained “legally” neutral even though it openly supported the Sanofi bid.
“When you watch a football match, you can support one side or the other, but you’re not the referee,” Devedjian said.
The deal between Sanofi and Aventis ends three months of bitter verbal warfare between the two companies.
Dehecq talked down Aventis’ drug development pipeline, while Aventis filed lawsuits against Sanofi on both sides of the Atlantic and warned investors that a U.S. patent challenge to it’s blockbuster blood thinner, Plavix, was a time bomb that could slash its share price. The lawsuits will be dropped, the Sanofi statement said.
