The Aventis-Sanofi Merger: Role of French Government?
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Case Details:
Case Code : BSTR116
Case Length : 17 Pages
Period : 1998-2004
Organization : Aventis SA and Sanofi SA.
Pub Date : 2006
Teaching Note :Not Available
Countries : France
Industry : Pharmaceutical
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
The Acquisition Bid
While Sanofi's CEO Jean-Francois Dehecq (Dehecq) felt that the proposed merger would lead to significant benefits for the combined entity, it was strongly opposed by Aventis' CEO Igor Landau (Landau). Asking Aventis shareholders to reject the bid, Landau alleged that Sanofi's move was a hostile attempt to acquire Aventis.
Aventis management board led by Landau strongly opposed Sanofi's offer (See Box
I) and recommended its supervisory board to reject the offer.
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The offer was soon rejected citing reasons that it was of a hostile nature and did not take into consideration the significant patent risks associated with Sanofi's main products.
The board further added that Sanofi's offer was at a premium of just 3.6% of the prevailing share price of Aventis, and was not in the best interests of the company's shareholders. Dehecq, however, disagreed with Aventis. In a press release issued by Sanofi, he stated "The combination of Sanofi-Synthelabo and Aventis will create long-term value for all shareholders and will be successful thanks to the dedication of both groups' employees towards a shared future..."
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The Takeover Battle
On February 03, 2004, The French financial markets authority, Autorité des marchés financiers (AMF) approved Sanofi's unsolicited tender offer to acquire equity stake in Aventis, pursuant to French tender offer rules. However, Aventis appealed against this decision.
The Supervisory Board of Aventis, on February 17, 2004, unanimously decided that Sanofi's
offer was not in the interest of the company, its shareholders and
employees.
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The board stated that the offer was financially inadequate and also involved certain important social risks like loss of job for Aventis employees, particularly in France and Germany, with limited benefits for Aventis.
It asked Aventis shareholders not to tender their shares to Sanofi.
On March 05, 2004, On behalf of the Aventis management board, on March 05, 2004, Landau in a press release stated, "On January 26, 2004, Sanofi submitted an unsolicited offer to the Paris Bourse authority, to take control of Aventis without any consultation between the two companies... |
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