Swiss group Novartis, which had been holding talks on its own bid for Aventis, said it was withdrawing from the negotiations after Aventis’ decision “to enter discussions with Sanofi, under strong pressure from the French government.”
A French finance ministry official, who asked to remain anonymous, confirmed information from sources close to the negotiations that Aventis had accepted an improved offer from Sanofi on Sunday.
The sources said Sanofi offered €69 a share for Aventis, a 14% increase from its previous offer of €60.43 made in January. Aventis shares had closed on Friday at €66.25 on the Paris bourse.
Aventis had rejected Sanofi’s initial offer as too low, and had courted Novartis to step in as a white knight and make a competing bid to stave off Sanofi.
But Sanofi, encouraged by Paris’ backing, on Saturday held its own board meeting to decide whether to raise its initial €48-billion ($57.1-billion) bid.
Aventis’ supervisory board had met on Sunday afternoon to discuss the developments. Union sources said the board voted by 13 to 2 with one abstention to accept the improved bid.
If Sunday’s deal is confirmed by shareholders, the resulting drugs-making group would rank third in the world after US-based Pfizer and British-based GlaxoSmithKline.
German and Swiss leaders were
French Prime Minister Jean-Pierre Raffarin immediately hailed the deal, which he said “would allow the preservation of decision-making centres and employment in France and in Europe and corresponds to a strategic interest.”
He said in a statement France hopes to see “the emergence of strong industrial poles, the only real response to delocalisation which threatens our economies and our research.”
Health Minister Philippe Douste-Blazy also welcomed the deal as “good news for the European Union.”
The French government had earlier bluntly said it favoured Sanofi’s bid over one extended by Novartis.
A spokesman for the French finance ministry said on Friday the government considered a merger between Aventis and the smaller Sanofi to be in “the national interest”.
The French interference has miffed the German and Swiss governments, both of which said political meddling in the corporate struggle was unwelcome. The European Commission has also raised an eyebrow.
Aventis president Igor Landau, who spent 28 of his 59 years working up the ranks at the company and its French predecessor Rhone-Poulenc, had called Sanofi’s initial bid “an attempted hold-up” that severely undervalued his company.
But Sanofi chief Jean-Francois Dehecq, a 64-year-old who is a friend of French President Jacques Chirac, has proved unstoppable in his mission to grow Sanofi, which he helped establish in 1973.
Today it ranks 15th in the global pharmaceutical sector.
Landau, who currently earns a salary of about two million euros a year, could walk away with a €24-million ($28-million) severance package.