Shareholders to decide the Sanofi Aventis takeover bid for Genzyme, Focus Reports
Release Date: 2010-11-15
After friendly merger talks in June 2010, Sanofi Aventis - the French pharmaceutical giant – publicly disclosed their takeover bid for Genzyme at the end of august, valuing the American biotechnology company at approximately US$18.4 billion.
According to the Wall Street Journal, the bid, for US$69 per share representing a 38% premium over the closing price the day the bid was announced, was not accepted by Genzyme management who asked for a higher offer before they engage in further negotiations.
This being the case, Sanofi decided to direct its offer to the shareholders of Genzyme and the whole decision depends on their answer. If the bid is accepted, this merger will add to several major ones who took place in the market in 2009 as Merck buying Schering-Plough and Roche’s acquisition of Genentech.
Genzyme, based in Cambridge Massachusetts, is the world’s largest manufacturer of medicines in the area of genetic diseases. In its 29 years since creation, it has evolved under the management of Henri Termeer from a small biotech company into an important biotech player on the global market.
Termeer’s vision for Genzyme was to become the leader in the rare diseases market - a niche market disregarded by the big pharmaceutical companies. Even though the company faced several manufacturing problems during the last years because of deficient quality issues, it is still expected to launch two blockbusters in the upcoming years which will dramatically improve the revenues for 2012 and 2013. The two drugs are now in the latest stage of clinical trials and they are new treatments for the multiple sclerosis and mipomersen areas.
Genzyme’s revenues for last year reached US$4.5 billion and are expected to grow to $6.6 billion in 2013 as announced by the Wall Street Journal.
This influx of cash is exactly what Sanofi needs since the French drug manufacturer is losing patents for some of its most important medicines in the next years. The company already announced its shareholders of a decrease in income for 2010 and as other major multinationals, is trying to use this merger in order to pay off the losses from patent expiries.
According to the Capital IQ, a company monitoring mergers and acquisitions (M&As), the deal will rank as 10th largest merger in the health industry. This is one of the many mergers and acquisitions happening in the pharmaceutical industry in the recent years and in the analysts view this is the result of the economic slowdown which makes international companies see M&As as the perfect way to increase their revenues.
| Type: | NORMAL |
| Company: | Focus Reports |
| Country: | Switzerland |