Now that we know Sanofi-Aventis and Genzyme are close to a deal, the question is, why? Something prompted this rapid acceleration toward a merger. Did Genzyme CEO Henri Termeer (photo) have a change of heart? Or was it Sanofi chief Christopher Viehbacher (photo)? Theories abound.
One is that Genzyme's disappointing fourth-quarter results changed Termeer's mind. As the Financial Times' Lex sees it, earnings at 10 percent below guidance helped give Termeer & Co. "their light-bulb moment." The initial scoffing at Sanofi's $69 advance has turned to cooperation, then, because Termeer "has come to his senses."
Another is that Viehbacher needs Genzyme. He got a brutal reminder of that last week, when an experimental breast cancer drug failed in clinical trials, Forbes figures. Together with eroding sales of the blood thinner Lovenox, which now has generic competition, that development setback shows how much Sanofi depends on bringing in new drugs.
Of course, if a deal is announced--as early as Monday, some sources say--we'll get a look at the balance of power. The price will tell all. The FT expects an increase of just $2 to $3 in the offer price, a "face-saving concession" for Termeer. Others see a bigger increase. We'll have to wait and see what the final numbers reveal.