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Aventis accepts sweetened Sanofi bid
Franco-German Aventis (AVEP.PA) has accepted an improved 53.7 billion euros ($63.81 billion) takeover bid from Sanofi-Synthelabo (SASY.PA) in a move creating the world's third-largest drug company, people familiar with the situation said. The decision by the company's board on Sunday is a snub to Switzerland's Novartis (NOVN.VX) which had been considering a rival offer but whose approaches were resisted by a French government keen to forge a national pharmaceuticals champion.
French Prime Minister Jean-Pierre Raffarin welcomed the deal, which was clinched after Sanofi improved its original stock-and-cash offer, made in January, by around 14 percent.
"The choice of a merger between Sanofi and Aventis will allow the preservation of decision centers and jobs in France and Europe, and is in line with a strategic interest," Raffarin said in a statement.
Company officials declined to comment on terms ahead of an official statement expected on Monday but sources said it gave Aventis shareholders more cash. The revised bid is 71 percent in shares and 29 percent in cash, against 81 and 19 percent, respectively, previously.
The standard per share entitlement for Aventis investors will be 0.83 Sanofi share plus 20 euros in cash and the 2003 dividend, sources said.
Sanofi had been under mounting pressure to sweeten its offer following a decision last week by Novartis, acting as a "white knight," to take up an invitation from Aventis to start merger talks.
In the event, however, Novartis never made a formal bid submission to the Aventis board.
The Swiss firm said it had decided not to bid following Aventis's decision to engage in discussions with Sanofi "at the strong intervention of the French government."
INTERVENTIONIST STREAK
That intervention may have secured France a corporate pharmaceutical giant but critics say it smacks of market interference could harm long-term investment.
"For domestic politics this is a win for (finance) minister (Nicolas) Sarkozy but if you look at the signal it sends the markets and foreign investment I think it is not a win," said a Novartis official, who asked not be identified.
It is not the first time Paris has intervened to encourage the creation of "national champions" able to compete with industry giants across the Atlantic.
In the past, the government has also moved to keep foreign firms out of takeover battles in the banking and oil sectors. More recently, it has helped arrange bailouts of France Telecom (FTE.PA), engineering firm Alstom (ALSO.PA) and computer-services group Bull.
Last Friday, the French government stepped up efforts to broker a deal between Aventis and Sanofi by calling top officials from the feuding companies to talks in Paris.
Had Sanofi lost out to Novartis in the battle for Aventis, it could potentially have been vulnerable to takeover bids itself when a key pact between its two largest shareholders expires at the end of 2004, leaving them free to sell their stakes.
Sanofi's offer for Aventis was widely seen as a defensive move in the face of possible interest from bigger players, such as Pfizer or Britain's GlaxoSmithKline (GSK.L).
Aventis shares have recently traded at a substantial premium to Sanofi's original offer as investors bet Novartis would trump it or Sanofi would put more cash on the table. ($1=.8415 Euro) |
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