Sanofi lining up debt for possible deals

It looks like Sanofi-Aventis is preparing to get into the acquisition business. The Financial Times reports that Sanofi has been in talks with bankers about financing for possible acquisitions as it looks to expand and diversify its business. The company generates some $4 billion in free cash flow a year, and its debt has been shrinking, so it's well positioned to make a deal. UBS estimates that the French pharma could raise up to $26 billion for a deal.

As you know, the talking heads last week all predicted that the Pfizer-Wyeth [1] deal might touch off a contagion of pharma mergers and buyouts. And analysts have played matchmaker with Sanofi before; Bristol-Myers Squibb, its partner on the blood thinner Plavix, is one oft-mentioned option [2]. The FT also floats the possibility of Amgen or Biogen Idec, but Amgen would probably be out of Sanofi's price range [3].

We'll have to wait and see which company Sanofi might zero in on. As for timing, the FT notes that Sanofi and its brethren have been holding back in anticipation of a move by Pfizer, figuring that if a smaller company made a buyout offer, Pfizer could step in and snatch the deal away. Now that Pfizer's committed, that fear of a bidding war is gone.

- read the FT story [4]

Related Articles:
Sanofi reportedly eyeing bid for Crucell [5]
What will Viehbacher bring to Sanofi? [6]
Sanofi, Zentiva in $2.6B buyout [7]
Will BMS be the next big takeover target? [2]
NYT article considers Bristol-Myers strategy [8]