Aventis vs. Sanofi-Synthelabo
In January 2004, a hopeful, scrappy Sanofi-Synthélabo officially announced that it was making a $60 billion bid to take over French-German drugmaker Aventis in an effort to become the world's third largest pharmaceutical group. Although France's Sanofi was quick to outline the advantages of the deal, the larger Aventis wasn't initially too keen on the offer.
"The Aventis Management Board, led by Chairman Igor Landau, would like to emphasize that the offer, which was launched without any prior approach from Sanofi-Synthelabo, is of a hostile nature and does not take into account the wide range of risks associated with this move," the company said in a statement urging a rejection of the deal. "The Management Board believes that there are other scenarios with a stronger industrial and social rationale."
However, both companies had profitable drugs: Sanofi-Synthelabo had Plavix, while Aventis was profiting on Lovenox sales. And the deal appeared very attractive: Aventis has a powerful presence in the U.S., but a relatively weak inventory of new drugs. It was the opposite for Sanofi--a full pipeline, but a poor presence in the U.S., the BBC reported.
But even the French government was wary and initially refused to take sides, and trade unions at the two companies called for protest demonstrations. However, the French Financial Markets Commission ruled that the takeover-share-exchange bid was legally acceptable, thus supporting Sanofi-Synthélabo's strategy. An alternative partner was sought, and Novartis made a move toward an Aventis merger.
But then the French government intervened--earning it some criticism--encouraging Sanofi to raise its offer in the wake of Novartis' approach. After Sanofi raised its offer, Novartis decided to discontinue negotiations and not submit a bid for a potential combination.