The Aventis-Sanofi Merger: Role of French Government?

For the financial year ending December 31, 1998, Rhône-Poulenc reported revenues of €13.232 bn and net earnings of €644 mn euros. The total employee strength of the company in 1998 was 65,180. Hoechst was one of the world's leading groups in the life sciences and chemical industry. For the year ending December 31, 1998, the revenues of Hoechst amounted to €22.346 bn and net earnings to €969 mn. The company's total employee strength during the merger was 96,967. Aventis was officially formed on December 15, 1999 after Rhône-Poulenc shareholders approved the merger by an overwhelming majority of 97.1%. After the merger, Aventis emerged as one of the world leaders in the development and marketing of pharmaceutical products.

For the financial year ending December 2003, Aventis Group (including operations of other subsidiaries in chemicals and animal health business) reported revenues of €17.815 bn and a net income of €1.901 bn (See Exhibit III). Sanofi-Synthelabo SA was formed in December 1998 when the managements of Sanofi and Synthélabo agreed to merge the two companies. At that time, Sanofi was the second largest pharmaceutical company in France while Synthélabo was the third largest. The majority equity stake in Sanofi was held by Elf Aquitaine, a subsidiary of Total⁹ while in Synthélabo, the majority equity stake was held by L'Oréal.¹⁰ Sanofi was established in 1973, when Elf Aquitaine merged several diverse companies engaged in healthcare, cosmetics, and animal nutrition operations into one subsidiary...