Sanofi steady in Aventis pursuit, offer premium unmoved

PARIS (CNI)--French pharmaceuticals group Sanofi-Synthélabo on Monday stood by its hostile offer for Aventis and said there was no reason to increase its bid, despite criticisms from the board of the Franco-German life sciences group.

 

Sanofi chairman and chief executive Jean-François Dehecq said no increase would be made to the offer premium - 15.2% over the weighted average closing price for one month ending 21 January - because Aventis shareholders would be buying into a strong, complementary research and development (R&D) pipeline.

 

He added that Sanofi had demonstrated strong earnings and forecast further growth for this year, backed by higher R&D spend. His comments came as Sanofi's unveiled its 2003 earnings.

 

As could be expected in the pharmaceuticals sector, the relative strengths of their R&D pipelines and effectiveness have become a pivotal point in the fight between the rival boards to convince shareholders of their respective cases. Aventis has already rebutted Sanofi's takeover offer as too low and claimed that the French group has a weaker R&D pipeline, which it argued presented a risk to its own shareholders.

 

Dehecq, however, said today he saw "strong, sustainable and profitable growth" prospects for a merged pharmaceuticals group as well as the prospect of true value creation. He argued that the merger made both strategic and industrial sense as it would form a group with a strong presence in Europe, especially France and Germany, plus it would be the strongest-growth company in North America.

 

As regards Japan, Dehecq noted that the merger would give "direct access to Japan" thanks to Aventis, and it would be able to go ahead with setting up clinical development bases as he had been mulling for some time.

 

Dehecq said he was confident that the strategy that helped create Sanofi-Synthélabo could be used to rapidly implement a merger with Aventis by applying a specific strategy for each product and each country.

 

In response to reporters' questions at the financial results press conference, he not deny that "serious social consequences" - or job cuts - were bound to arise from a merger, pointing to Sanofi only having one headquarters, in Paris, while Aventis had two in Europe and one in the US.

 

He added that production sites would be adapted but, with forecast growth prospects, more capacity would be needed.