Sanofi-Synthelabo And Aventis Case Study

1499 Words 6 Pages
esentation analyses the events leading up to the 2004 merger between the pharmaceutical companies Sanofi-Synthelabo and Aventis. It reveals the social, commercial and political complexities and challenges of a merger process in which the defence of French national interests and regional capabilities competed with traditional ‘commercial’ narratives before the deal was closed.

presentation critically evaluates the competing criteria adopted by government and industry to justify different merger scenarios and considers the implications for pharmaceutical innovation, industry consolidation and M&A theory The American economy greatest market for the pharmaceutical industry in 2004 the tax cuts and the lower interest rates stimulated expansion
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€8 billion were generated in revenues for a net profit of €2 billion that yielded ROA and ROE of 20.62% and 31.75%,
The main shareholders of the company were L’Oréal, former main shareholder of Synthélabo, and Total, which had acquired ELF Aquitaine, the main shareholder of Sanofi. Nevertheless, around 50% of the shares were public.
The core business of Aventis is discovery, development and marketing of branded prescription drugs, vaccines and animal health products Aventis came to existence in 1998 as a result of a series of mergers and acquisitions and enjoys a solid position as one of the world’s largest pharmaceutical companies its roots to 1858 with the foundation of Poulenc its operations as a drugstore in France. Subsequently, Poulenc expanded into chemicals, and even photography supplies and contributed greatly to the production of various drugs and medical supplies that were utilized by the French military during WWI. Another French company, Rhone, began its operations in 1895, specializing mainly in the production of fragrances and perfumes, the two companies joined to
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- Aventis took the opportunity to criticize Sanofi’s timing of the proposed acquisition, which was just before the release of very promising forecasts of growth and battle about plavix patent - the goal of the takeover was create a strong company, reorganizing it in such a way to reduce costs and to remove overlaps as sanofi CEO said - Unions from both companies were concerned about the detrimental impact on employment that this merger could have. From the unions’ point of view, the employees were the major losers in deals such the Sanofi takeover, and they called for protest demonstrations
CEO of SA-SY, submitted an offer to Aventis shareholders for €47.8 billion, in what is known as a hostile bid - Aventis’ Management team quickly reacted by refusing the offer, arguing that it greatly undervalued Aventis shared (which they believed were already undervalued by the market) - Sanofi insisted on the fact that they were in a strong financial position and that the financial power of the two companies would enable them to develop a much larger number of products that were in their

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