09 February 2004 18:21 [Source: ICIS news]
LONDON (CNI)--Total and L’Oreal, which together hold a controlling stake in French pharmaceutical company Sanofi-Synthelabo, confirmed on Monday that they have agreed formally to back the hostile Euro48bn ($61bn) bid for Anglo-German life sciences group Aventis.
French energy and petrochemicals group Total and compatriot cosmetics maker L'Oreal said they signed a memorandum of understanding on the 25 January clarifying their positions should a merger between Sanofi and Aventis go ahead.
In the memorandum, revealed on Friday to the French regulatory authority, the AMF, Total and L'Oreal agreed to relinquish their rights under a former agreement to block or amend the Sanofi bid for Aventis because of the likely dilution in their holdings.
Total, which has a 24.4% stake in Sanofi, and 19% shareholder L'Oreal acknowledged that completion of a merger between Sanofi and its larger rival Aventis would reduce their holdings in an enlarged Sanofi and effectively prevent consolidation of the company's profits in their financial statements.
But their backing for Sanofi's bitterly contested offer for Aventis makes it very much less likely that a third party could now bid for Sanofi and scupper the takeover plans.
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