PARIS, Jan 26 (AFP) – French pharmaceutical group Sanofi-Synthelabo launched a hostile bid Monday to take control of rival Aventis and create a global giant, a move rejected by Aventis but welcomed by the French government to challenge US and Asian rivals.
Sanofi made a hostile stock-and-cash offer for its bigger rival, valuing it at about EUR 47.8 billion (USD 60.1 billion) in a move which is focusing attention on the European pharmaceutical sector..
The terms represent a premium of 15.2 percent to Aventis’ capitalisation in the last four weeks, Sanofi said, and values the Aventis share at EUR 60.43.
On Friday, Aventis shares added 1.68 percent to close at EUR 57.55 and Sanofi was off 6.93 percent at EUR 57.75. Trading in shares of both companies was suspended in Paris until 1400 GMT Monday.
Aventis said in a statement the bid was too low.
The Sanofi offer contains a proposed premium of 3.6 percent over the last closing price of the Aventis shares, which was “not in the best interest of its shareholders,” it said.
Aventis said it was instead evaluating other options for the future of the company which will be more beneficial in both social and economic terms.Sanofi chairman Jean-Francois Dehecq insisted that the bid was “not aimed at anyone.”
“It is for the future and the continuation of the companies.”
A key goal in the takeover strategy, approved on Sunday by the Sanofi board and main shareholders oil group Total and cosmetics group L’Oreal, is to give the combined groups a world-class research force.
Rumours of a deal had been in the air all last week but only on Friday Aventis chairman Igor Landau had shrugged off talk of a hostile bid, saying such aggression in the world of pharmaceuticals was rare.
If successful, the transaction would create the number one pharmaceutical group in Europe and the number three in the world, Sanofi said in a statement.Dehecq told a press conference that a friendly bid would have taken too long to work out.
“To make a direct, open and public offer avoids a slow process that could become subject to all sorts of speculation,” he added.
The combined group will have pro forma 2002 consolidated sales of EUR 25 billion in its core businesses and a strong direct presence in all major world markets, according to a Sanofi statement.
“Sanofi-Synthelabo believes that the enhanced scale, financial strength and research and development resources will allow the new group to serve patients worldwide and to enhance shareholder value,” it said.
Hostile takeovers are a rarity in continental Europe, where corporate culture sneers at such brash Anglo-American aggressiveness.
But French social affairs minister Francois Fillon hailed the proposed takeover as a means of creating “world leadership” and sought to counter concerns it would lead to job cuts in France.
“On the contrary, what is dangerous for employment is to leave European industry divided, in pieces and under threat from the United States,” he said.
Fillon stressed the need for a European industrial strategy, saying he favored the creation of “European giants in all the industrial domains capable of outperforming or at least resisting the United States and the major Asian companies”.
Trade unions have already expressed alarm at likely job cuts among Aventis’s 71,000 employees if the deal goes through.
The composition of the bid is 81 percent in shares and 19 percent in cash, the French markets regulator AMF said.
The main offer is five new shares for every six shares in Aventis, plus EUR 69 in cash.
It is also making two subsidiary offers: The first is at the rate of 35 of its own shares for 34 shares in Aventis with dividend rights, while the second is at EUR 60.43 per Aventis share with dividend rights.
Sanofi is seeking a 100-percent takeover for Aventis, and the bid is contingent upon it obtaining 50 percent of Aventis shares and voting rights, the AMF said.
If successful, the takeover will create the world’s third-largest pharmaceutical group behind US group Pfizer and GlaxoSmithKline of Britain.
News of the takeover bid appeared to spark a small rise in shares of Swiss pharmaceutical group Roche, which is regarded as a potential takeover target for Swiss rival Novartis.
Roche shares were trading at 127.25 Swiss francs on the Zurich stock exchange at 1101 GMT, up by 1.4 percent.
Novartis chief executive Daniel Vasella admitted last Thursday that the pharmaceutical market was ripe for consolidation.
Subject: France news