Paris market regulator confirms Sanofitakeover of Aventis

9th August 2004, Comments 0 comments

PARIS, Aug 9 (AFP) - The French pharmaceutical group Sanofi-Synthelabo's takeover bid for its larger rival Aventis has succeeded according to preliminary results, France's Financial Market Authority said Monday.

PARIS, Aug 9 (AFP) - The French pharmaceutical group Sanofi-Synthelabo's takeover bid for its larger rival Aventis has succeeded according to preliminary results, France's Financial Market Authority said Monday.  

Sanofi-Synthelabo was on course to obtain "89.84 percent of shares and 89.88 percent of the voting rights in Aventis", surpassing Sanofi-Synthelabo's self-imposed minimum of gaining 50 percent of Aventis for the offer to go through, the Financial Market Authority said in a statement.  

The French market authority is due to reveal the final results of the offer on August 12.  

The price of shares in Sanofi rose by 1.27 percent in response to the statement in initial trading. However, by midday the gains had been eroded as European shares slumped lower on broadly negative investor sentiment and the stock was only 0.09 percent higher at 55.25 euros.  

The leading CAC 40 market index was showing a loss of 1.06 percent at 3,491.15 points.  

One broker here, who declined to be named, commented that the success of the bid was good news "even though there was little doubt it would succeed".  

Launched on January 26, the Sanofi's offer was first rejected by Aventis because it considered the bid to be too low.  

After weeks of fierce opposition, Aventis chairman Igor Landau finally accepted the tie up under pressure from the French government.   Deeming the deal to be "strategic" for France, the state urged the two companies together after Swiss drugs giant Novartis voiced an interest in Aventis, sparking concern among the French authorities about an outsider stepping into into the fray.  

The French government's interventionist attitude raised the ire of German officials and doubts about the devotion of French Prime Minister Jean-Pierre Raffarin's cabinet to free-market practices common in other major economies.  

But Sanofi chief executive Jean-Francois Dehecq also helped make the deal more temping for Aventis' management and shareholders by raising the offer by EUR 7 billion (USD 8.59 billion) to EUR 48 billion.  

Sanofi has had to take on debt of EUR 16 billion from banks in order to swallow up Aventis, which is two times bigger in terms of sales.  

With a research budget of EUR 4.2 billion, the new group will be headed by Dehecq and the board will have 17 members of which eight come from Aventis. Landau will not be part of the management team but he will be on the board.

 

© AFP

 

Subject: French news

 

 

 

 

 

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