Hoechst, Rhone-Poulenc merger

21 May 1999 09:39  [Source: ICIS news]

LONDON (CNI)--Life sciences are more lucrative than chemicals. That was the rationale behind the merger of Germany's Hoechst and France's Rhone-Poulenc (R-P) to create Aventis and offload their chemicals businesses.

Market speculation forced Hoechst and R-P into the spotlight with their plan in late 1998, but their initial concept of a two-step merger taking up to three years to achieve was not impressive to investors and markets.

In March 1999, the companies bowed to pressure and announced a revised plan - a single step "accelerated" merger to be achieved by the end of 1999, which they successfully achieved through a 53:47 equity split in Hoechst's favour. The corporate headquarters, though, is in Strasbourg, France as the merger was executed by R-P making a share offer for Hoechst stock.

They pulled off the fast-track tie-up by pooling most of Hoechst's chemicals interests under the umbrella of an enlarged Celanese, which was spun-off in October 1999 and R-P selling its controlling stake in specialty chemicals firm Rhodia.

The enlarged Celanese AG consists of: the original Celanese; Ticona; the food ingredients firm Nutrovina; and the polypropylene (PP) films business Trespaphan. It is also holding its 50% stake in the DyStar joint venture with Bayer, which has clubbed into a three-way textile dyes venture with BASF, effective from 1 April 2000.

Celanese AG sold its 50% share in the Targor PP joint venture to partner BASF and its 46% stake in the fluoropolymers joint venture Dyneon to its partner, 3M. With its 50:50 partner Wacker-Chemie, Celanese AG sold the polyvinyl chloride (PVC) joint venture Vinnolit to private equity concern Advent International.

Claudio Sonder is chairman of Celanese AG with Knut Zeptner head of Celanese Chemicals and Acetate, and Edward Munoz in charge of Ticona technical polymers business. Chief financial officer is Perry Premdas. Ernst Schadow is personnel director responsible for affiliates, environmental protection and technology.

The Aventis group will consist primarily of the pharmaceuticals and agricultural interests of Hoechst and R-P under the banners of Aventis Pharma and Aventis Agriculture.

Aventis Pharma includes the following business interests: Hoechst Marion Roussel; Rhone-Poulenc Rorer; Pasteur Merieux Connaught, the 50% share of the joint venture with Merck & Co - Pasteur Merieux-Merck Sharp Dohme; Centeon; and Hoechst's interest in Dade Behring. The group's agricultural arm holds: Rhone-Poulenc Agro; Hoechst Schering AgrEvo; Rhone-Poulenc Animal Nutrition; and the 50% stake in the Merial joint venture with Merck & Co.

Although a life sciences business, initially Aventis contains a number of chemicals businesses from Hoechst - 66.7% of Messer and 50% of Wacker-Chemie. It was to have held Hoechst's animal health company Hoechst Roussel Vet (HRV), but that was sold to Akzo Nobel shortly before the creation of Aventis.

Aventis chairman is Jurgen Dormann, formerly the chief executive officer of Hoechst. The vice chairman is Jean-Rene Fourtou, who was R-P's chief executive officer. Richard Markham is chief executive officer of Aventis Pharma, Alain Godard is head of Aventis CropScience, and Patrick Langlois is chief financial officer for the group.

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