Sanofi-Aventis makes 18.5 bln dollar bid for US Genzyme

29th August 2010, Comments 0 comments

French pharmaceutical group Sanofi-Aventis unveiled Sunday a 18.5 billion dollar (14.5 billion euro) cash bid for US biotechnology firm Genzyme, or 69 dollars per share.

The non-binding offer, exclusively in cash, represents a 38 percent premium over the 49.86 dollars Genzyme's shares closed at on July 1 before takeover rumours began to swirl, according to Sanofi.

Sanofi said it was disclosing to Genzyme's shareholders the contents of its offer, which it initially made in July, after the company's management rejected it on August 11 and declined to enter into further talks.

"A combination with Genzyme represents a compelling opportunity for both companies and our respective shareholders and is consistent with our sustainable growth strategy," Sanofi chief executive Christopher Viehbacher was quoted as saying in a company statement.

Sanofi said analysts estimated the offer represents a multiple of 36 times Genzyme's 2010 earnings per share and 20 times 2011 earnings per share, and that the offer price takes into account an anticipated recovery in Genzyme's performance in 2011.

"The all-cash offer provides immediate and certain value for Genzyme shareholders at a substantial premium that recognizes the company's upside potential, while Sanofi-Aventis shareholders would benefit from the accretion and the attractive growth prospects of this combination," Viehbacher said.

The French pharmaceutical company said the buyout would allow Genzyme to increase investment into its products that address rare diseases, kidney disease, orthopedics, cancer, transplant and immune diseases, and diagnostic testing.

Sanofi said it is committed to entering into constructive talks with Genzyme's management, but is prepared to consider alternatives if necessary to successfully acquire the company based in Cambridge, Massachusetts.

Sanofi said it had already secured the financing for the transaction.

© 2010 AFP

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